Salaried employees take note! Reduce TDS from salary with new Form 12BAA released by CBDT – details here – Times of India


The new form will enable employees to provide information about TCS and TDS from other sources. (AI image)

TDS for salaried employees: The Central Board of Direct Taxes (CBDT) has introduced a new form, Form 12BAA, to facilitate the implementation of the Budget 2024 announcement regarding the adjustment of TDS and TCS from other sources against salary TDS.
Employees will use Form 12BAA to inform their employers about tax deductions from sources other than their salaries.These sources may include fixed deposits, insurance commissions, dividends from equity shares, or tax collected while making purchases, such as buying a car or foreign currency.
According to the PIB press release dated October 17, 2024, “Vide CBDT Notification No. 112/2024 dated 15.10.2024, the Income-tax Rules, 1962 (‘the Rules’) have been amended, introducing Form No. 12BAA as the prescribed statement of particulars required under sub-section (2B) of Section 192 of the Act. Employees must provide these particulars to their employers, who are responsible for making payments under sub-section (1) of Section 192. The employer, in turn, shall deduct TDS on salary after taking into account the furnished particulars.”
Also Read | Beware of ITR refund scam! You may lose lakhs with new income tax refund fraud – check I-T department advisory

How does new Form 12BAA help reduce TDS from salary?

  • CBDT has introduced a new form that allows employees to inform their employers about Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) from other sources of income. This change aims to address the issue of employers not adjusting the taxes paid by employees against other sources when deducting TDS from their salaries.
  • Previously, employers would deduct TDS based on the declaration provided by the employee, considering investments and expenses eligible for tax deductions.
  • However, the newly notified form from the CBDT will enable employees to provide information about TCS collected and TDS deducted from other sources. By doing so, employees can reduce the tax deduction from their salaries, helping them manage their cash flow more effectively and increase their disposable income.
  • The new law came into effect on October 1, 2024, and the CBDT notified the new form on October 15, 2024.

Abhishek Soni, CEO of Tax2Win.in, an ITR filing website, told ET, “An employee who wants to lower the tax deducted from salary and hike the take-home pay can use Form 12BAA to inform the employer about taxes deducted from any other source of income or taxes paid while making expenses. Form 12BAA is similar to Form 12BB, which the employee uses to make an investment declaration to the employer so that TDS on salary is deducted accordingly. “
The CBDT has also modified Form 12BB to enable employees to provide additional details about their income beyond salary, report house property losses with verification, and claim TCS credit through their employer.
According to Sudhir Kaushik, CEO of Taxspanner, these changes are intended to curb tax evasion and facilitate faster processing of Income Tax Returns (ITR).
Also Read | New TDS rates from October 1, 2024: What are the revised tax deducted at source rates? Check list of changes for these transactions
The 2024 Budget has introduced measures to streamline the process of claiming credit for tax collected at source and tax deducted at source for salaried individuals. This move aims to address the cash flow challenges faced by employees and reduce the compliance burden associated with claiming refunds.
The Budget announcement states, “Representations have been received that credit of TCS paid should be allowed while computing the amount of tax to be deducted on salary income of the employees as this will help in avoiding cash flow issues for employees. Similarly, all TDS may be taken into account for the purpose of deduction of tax from the salary income of employees. Moreover when the TCS etc is not taken into account, the same is required to be claimed as a refund by the employee which adds to the compliance process. In order to ease compliance, it is proposed that sub-section (2B) of section 192 may be amended to expand the scope of the said sub-section to include any tax deducted or collected under the provisions of Chapter XVII-B or Chapter XVII-BB, as the case may be, to be taken into account for the purposes of making the deduction under sub-section (1) of section 192.”





Source link

By Exabyte News

Your ultimate source for trending news! Stay up-to-date with the latest viral stories, hottest topics, and breaking news from Exabyte News. Stay ahead with our in-depth coverage.

Leave a Reply

Your email address will not be published. Required fields are marked *