If any employee joins a company in mid of the year, how to consider the standard deduction which was deducted from an previous employer, whether it will be partially claimed from both the employers or it will be claimed from previous?

The standard deduction of Rs.40,000 for AY 2019-20 and Rs.50,000 for AY 2020-21 is available for assesse under Sec 16(ia) from the income chargeable under the head salaries.

For the income to be chargeable under the head salaries there shall exist an employer and employee relationship. As the Section 16(ia) states that “a deduction of forty thousand]/ [fifty thousand] rupees or the amount of the salary, whichever is less;”. 

By the provision of the act it is understood that the limit of Rs.40,000 is for the income under salaries. It does not refer to whether the salary is from a single employer or from multiple employer.

If an employee joins a company in the mid of the year i.e. in a year the employee has worked under two employers. The standard deduction available would be Rs.40,000 and not Rs.80,000 as the Act does not specify that the deduction is per employer.
The proportion of deduction for the previous employer is not required to be computed.

Suppose both the employers in their computation for TDS deduction have considered as Rs. 40,000 each. This would mean that there is short TDS deducted over the period of employment. At the time of filing ITR the standard deduction would be considered as Rs. 40,000 and the balance tax after reducing the TDS deducted would be required to be paid by the assesse.

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