Form 64A

Intro to Form 64A

Form 64A is a critical document used in Indian payroll and tax compliance. It serves as a declaration form that employees submit to their employers regarding income from previous employment within the same financial year. This form ensures accurate tax deduction at source (TDS) and helps avoid tax complications at year-end.

Definition of Form 64A

Form 64A is an employee declaration form prescribed under Indian income tax regulations. When an employee joins a new organization during a financial year, they use this form to disclose salary and tax details from their previous employer. The form includes information about gross salary earned, TDS deducted, professional tax paid, and other relevant income details from the former employer. Based on this information, the current employer can calculate the correct TDS for the remaining months of the financial year. This prevents under-deduction or over-deduction of taxes, ensuring compliance with Income Tax Act provisions. Employers must maintain these forms as part of their statutory records for verification purposes.

Importance of Form 64A in HR

Form 64A plays a vital role in maintaining tax compliance and ensuring smooth payroll operations. First, it enables accurate TDS calculation by providing a complete picture of an employee’s annual income. Without this form, employers would only consider the salary paid by them, potentially leading to incorrect tax withholding. Second, it protects employees from tax notices and penalties that arise from discrepancies in annual tax statements. Third, the form helps HR departments maintain statutory compliance and avoid legal issues during tax audits. Additionally, proper Form 64A documentation streamlines the year-end reconciliation process and Form 16 generation. Similar to how Form W-4 functions for tax withholding in the United States, Form 64A ensures proper tax management in the Indian context.

Examples of Form 64A

Example 1: Mid-Year Job Change
Priya worked at Company A from April to August, earning ₹4,00,000 with ₹40,000 TDS deducted. She joined Company B in September. She submitted Form 64A to Company B declaring her previous income and TDS. Company B then calculated her remaining tax liability for September to March, ensuring her total annual TDS aligned with her complete yearly income of ₹10,00,000.

Example 2: Multiple Employer Scenario
Rajesh switched jobs twice during the financial year. He worked at three different companies and submitted Form 64A to his third employer. The form consolidated income details from both previous employers, totaling ₹6,50,000 with ₹65,000 TDS already deducted. His current employer used this information to compute accurate TDS for the remaining employment period.

Example 3: Incomplete Declaration Impact
Anil joined a new company but did not submit Form 64A. His employer calculated TDS only on the salary paid by them (₹3,00,000). At year-end, when filing returns, Anil discovered significant tax shortfall because his total income was ₹8,00,000. He faced additional tax payment and interest charges that could have been avoided with proper Form 64A submission.

How HRMS Platforms Like Asanify Support Form 64A

Modern HRMS platforms streamline Form 64A management through automated workflows and integrated payroll systems. These platforms typically provide digital form submission interfaces where new employees can enter their previous employment details directly. The system validates the information and automatically incorporates it into TDS calculations. Additionally, HRMS solutions maintain digital records of all submitted forms, making retrieval easy during audits. They also generate alerts when employees join mid-year without submitting required declarations. Integration with payroll modules ensures that previous income data flows seamlessly into monthly salary processing and annual tax computation. Furthermore, these platforms can cross-verify Form 64A data against Form 16 from previous employers, identifying discrepancies early. This automation reduces manual errors and ensures consistent compliance across the organization.

FAQs about Form 64A

When should an employee submit Form 64A?

An employee should submit Form 64A immediately upon joining a new organization if they have worked elsewhere during the same financial year. Ideally, submission should happen during the onboarding process or before the first salary processing to ensure accurate TDS calculation from the beginning.

What happens if Form 64A is not submitted?

If Form 64A is not submitted, the current employer will calculate TDS only on the salary they pay, ignoring previous income. This leads to lower TDS deduction throughout the year, resulting in tax shortfall, additional payment obligations, and potential interest charges when filing annual returns.

Is Form 64A mandatory for all employees?

Form 64A is mandatory only for employees who have changed jobs during the current financial year and have earned taxable income from a previous employer. Employees joining their first job or those who start in a new financial year do not need to submit this form.

What documents support Form 64A declaration?

Employees should support Form 64A with their last salary slip from the previous employer, Form 16 Part B or TDS certificate, and bank statements showing salary credits. These documents help verify the declared income and TDS amounts, ensuring accuracy in tax calculations.

Can Form 64A be revised after submission?

Yes, Form 64A can be revised if the employee discovers errors or receives updated information from their previous employer. The employee should submit a corrected form to the current employer as soon as possible, and the employer should adjust subsequent TDS calculations accordingly.