Switching jobs is a part of our professional life. While some change jobs for a hike in salary, others switch jobs for better designation, company. However, in the midst of all the excitement relating to your job change, one must not forget the tax angle. Here are four critical aspects of tax you need to manage when you change jobs.

Declaration of previous income to new employer

If you switch job in the middle of a financial year, then you need to provide details of your payment from the previous employer to your new employer following which the new employer will take a consolidated view of your full-year income and the investment declaration and then work out your monthly tax liability. So it is important that you disclose your income from all sources to the new employer. But if you are joining a new job from April 1 then you don't need to submit income details from the previous company.

Submit documents pertaining to tax-saving investments, home loan

When you switch your job you new need to submit all the documents pertaining to tax-saving investments and home loan, education loan if any. Here you have to ensure that the declaration must be exactly the same which you have submitted to the previous employer.

Joining bonus and severance pay

Joining bonus is paid to a new employee at the time of joining a job provided you continue in the job for a minimum period of time. Your employer deducts TDS on this amount. If you do not serve the company for the minimum period of time, then you will have to refund the proportionate sum to your employer. In such a case, you can claim a refund of TDS that the previous employer may have deducted on the joining bonus. Ensure that you submit these details to your new employer.

Companies typically pay severance package to senior officials to prevent them from taking up similar jobs with a competitor firm. This pay is treated as a regular income and taxed at your normal rates. Details of this pay, if any, must be disclosed to the employer.

Provident fund and gratuity receipts

If you are shifting your employee's provident fund account from an old employer to the new employer, then there will not be any tax liability. But, if you are withdrawing your EPF before completing five years with your previous employer, then the EPF withdrawal amount will be added to your annual income and will be taxed as per your slab. Meanwhile, gratuity up to Rs 20 lakh is exempt from tax. Gratuity received above Rs 20 lakh is taxable. You need to disclose these receipts to your prospective employer.