Standard deduction is Rs 75,000 per year — not per employer.
If you switched jobs in FY 2025-26, both your employers applied Rs 75,000 standard deduction in their TDS calculations. That means Rs 1,50,000 in deductions were assumed — but you are entitled to only Rs 75,000. The extra Rs 75,000 means lower TDS was deducted all year, and you owe the difference at ITR filing.
At the 15% slab, that is Rs 11,700 extra tax. At 30%, it is Rs 23,400.
This is the most common tax trap for mid-year job switchers, and it catches thousands of employees every filing season.
How the Double Standard Deduction Happens
Here is the math for someone who earned Rs 8 lakh from Employer A (April-September) and Rs 9 lakh from Employer B (October-March):
What Each Employer Computes Independently
| Employer A | Employer B | |
|---|---|---|
| Salary paid | Rs 8,00,000 | Rs 9,00,000 |
| Standard deduction applied | Rs 75,000 | Rs 75,000 |
| Taxable salary (for TDS) | Rs 7,25,000 | Rs 8,25,000 |
| TDS deducted | ~Rs 22,750 | ~Rs 33,750 |
| Total TDS deducted | Rs 56,500 |
What You Actually Owe
| Correct Computation | |
|---|---|
| Total salary (A + B) | Rs 17,00,000 |
| Standard deduction (once) | Rs 75,000 |
| Taxable salary | Rs 16,25,000 |
| Tax on Rs 16,25,000 (new regime) | Rs 1,81,250 |
| Cess (4%) | Rs 7,250 |
| Total tax | Rs 1,88,500 |
| TDS already deducted | Rs 56,500 |
| Self-assessment tax due | Rs 1,32,000 |
The shortfall is not just from double standard deduction — it also comes from bracket creep. Each employer computed TDS assuming your salary was Rs 8-9 lakh (lower slabs). Your combined salary of Rs 17 lakh pushes you into higher slabs that neither employer accounted for.
The Fix: Submit Form 12B
Form 12B is the document you submit to your new employer declaring your previous employer’s salary, TDS, and deduction details.
What Form 12B Contains
- Previous employer’s name, PAN, and TAN
- Salary/income earned and reported under each head
- Tax deducted at source (TDS) with details
- Deductions and exemptions claimed (standard deduction, HRA, etc.)
- Any perquisites or profit in lieu of salary
What It Fixes
When the new employer has Form 12B data, their payroll system:
- Adds your previous salary to projected current salary
- Applies standard deduction only once against the combined figure
- Credits TDS already deducted by the previous employer
- Computes monthly TDS on the remaining balance
This distributes the tax burden evenly across remaining months instead of hitting you with a lump sum in July.
The Practical Problem
Many employers have rigid payroll systems that either:
- Do not accept Form 12B inputs properly
- Apply standard deduction anyway in their computation
- Adjust TDS incorrectly, creating a different mismatch
If your new employer’s payroll cannot handle Form 12B correctly, the alternative is to request higher TDS deduction. You can write to HR asking them to deduct additional TDS each month to cover the shortfall. This is not a formal mechanism but most large employers accommodate it.
Step-by-Step: Filing ITR with Two Form 16s
Step 1: Gather Documents
- Form 16 from Employer A (April-September or relevant period)
- Form 16 from Employer B (remaining period)
- Form 26AS from TRACES portal (verify TDS amounts match)
- Annual Information Statement (AIS) from e-filing portal
Step 2: Verify TDS Match
| Check | Source |
|---|---|
| TDS from Employer A | Form 16A Part A = Form 26AS entry |
| TDS from Employer B | Form 16B Part A = Form 26AS entry |
| Salary from Employer A | Form 16A Part B = AIS salary entry |
| Salary from Employer B | Form 16B Part B = AIS salary entry |
If there is a mismatch: the employer must file a revised TDS return. Contact their payroll team. Do NOT file ITR with incorrect TDS — it will trigger a demand notice.
Step 3: Consolidate Income
| Item | Amount |
|---|---|
| Gross salary — Employer A (from Part B) | Add here |
| Gross salary — Employer B (from Part B) | Add here |
| Total gross salary | Sum |
| Less: Standard deduction (Section 16(ia)) | Rs 75,000 (once only) |
| Less: Professional tax (Section 16(iii), old regime only) | Sum from both employers |
| Net salary income | — |
Step 4: Compute Tax and Pay Shortfall
- Apply applicable tax slabs on total income
- Add 4% health and education cess
- Subtract total TDS from both employers
- Pay balance as self-assessment tax using Challan 280 on the e-filing portal
- Use the challan details (BSR code, date, serial number) while filing ITR
Step 5: File ITR-1
- ITR-1 works if you have salary income, one house property, and other sources up to Rs 50 lakh
- If you have capital gains, business income, or foreign income — use ITR-2 or ITR-3
- Enter salary details employer-wise in Schedule S
- Enter standard deduction as Rs 75,000 in the Section 16 field
The TDS Shortfall at Different Salary Levels
Here is the typical shortfall when both employers apply separate standard deduction, assuming new regime:
| Employer A Salary | Employer B Salary | Combined | Extra SD Claimed | Approximate Shortfall (Tax + Cess) |
|---|---|---|---|---|
| Rs 5,00,000 | Rs 5,00,000 | Rs 10,00,000 | Rs 75,000 | Rs 7,800 (10% slab) |
| Rs 6,00,000 | Rs 8,00,000 | Rs 14,00,000 | Rs 75,000 | Rs 11,700 (15% slab) |
| Rs 8,00,000 | Rs 10,00,000 | Rs 18,00,000 | Rs 75,000 | Rs 15,600 (20% slab) |
| Rs 10,00,000 | Rs 12,00,000 | Rs 22,00,000 | Rs 75,000 | Rs 19,500 (25% slab) |
| Rs 12,00,000 | Rs 15,00,000 | Rs 27,00,000 | Rs 75,000 | Rs 23,400 (30% slab) |
Note: The actual shortfall is usually HIGHER because of bracket creep. Each employer computes TDS at lower slabs; combined income hits higher slabs.
The Bracket Creep Problem
Double standard deduction is only part of the problem. The bigger issue is that neither employer knows your total income.
Example: You earned Rs 11 lakh from Employer A and Rs 9 lakh from Employer B.
Employer A’s TDS computation (standalone):
- Salary: Rs 11,00,000
- Standard deduction: Rs 75,000
- Taxable: Rs 10,25,000
- Tax: Rs 52,500 + cess = Rs 54,600
- Monthly TDS: ~Rs 4,550
Employer B’s TDS computation (standalone):
- Salary: Rs 9,00,000
- Standard deduction: Rs 75,000
- Taxable: Rs 8,25,000
- Tax: Rs 32,500 + cess = Rs 33,800
- Monthly TDS: ~Rs 5,633
Combined TDS: Rs 88,400
Actual tax on Rs 20 lakh (one standard deduction):
- Taxable: Rs 19,25,000
- Tax: Rs 3,31,250 + cess = Rs 3,44,500
Shortfall: Rs 2,56,100 — and this is not a small amount. Most of the shortfall comes from bracket creep, not double standard deduction.
The lesson: Always submit Form 12B. If that fails, calculate your total tax liability yourself by September and pay advance tax for the remaining installments.
Special Situations
Overlap Period (Both Employers in Same Month)
If you served notice at Employer A while starting at Employer B — both may pay salary for overlapping days. Both deduct TDS. During ITR:
- Count the overlap salary from both employers
- No duplication issue — both are legitimate salary income
- Standard deduction: still once
Employer A Did Not Issue Form 16
Download Form 26AS and AIS. Both show TDS deducted and salary reported by your previous employer. If Employer A was deducted but not deposited TDS with the government, you will see a mismatch — follow up with the employer. If they are defunct, you can still claim TDS credit if it appears in Form 26AS (deposited by the employer before closing).
Freelancing Between Jobs
If you did freelance work between leaving Employer A and joining Employer B:
- Freelancing income is under Business/Profession — no standard deduction
- Salary income from both employers — one standard deduction
- File ITR-3 (not ITR-1)
- TDS on freelancing (Section 194J) does NOT count toward salary TDS
International Transfer
If you were transferred from an Indian entity to a foreign entity mid-year:
- Indian salary: standard deduction applies
- Foreign salary: not taxable in India if earned for services outside India (and you are an NRI for that period)
- Residential status determination matters — 182-day or 60-day rule depending on citizenship
- Consult a CA for cross-border situations
Timeline: What to Do When
| When | Action |
|---|---|
| Day 1 at new job | Submit Form 12B with previous employer details |
| Within 30 days | Verify new employer has incorporated Form 12B in TDS |
| By June 15 | Collect Form 16 from previous employer (deadline for employer to issue) |
| By June 30 | Download Form 26AS, AIS — verify TDS from both employers |
| By July 15 | Compute total tax, pay self-assessment tax if needed |
| By July 31 | File ITR-1 (or ITR-2/3 if applicable) |
| If shortfall > Rs 10,000 | Pay advance tax in quarterly installments to avoid interest |