Central Board of Direct Taxes (CBDT) has notified amendments in income-tax rules for ease in claiming credit for TCS collected/TDS deducted for salaried employees and enabling claiming TCS credit of minors in the hands of parents.
Income-tax Act rules as per CBDT Notification No. 112/2024 dated 15.10.2024 have been amended to include any tax deducted or collected at source for the purpose of making tax deductions in the case of salaried employees.
Vide CBDT Notification No. 112/2024 dated 15.10.2024, the Income-tax Rules, 1962 (‘the Rules’) have been amended,
Form No. 12BAA has been introduced as the prescribed statement of particulars required to be furnished by employees. Employees must provide these particulars to their employers, who are responsible for making payments who in turn, will deduct TDS on salary after taking into account the furnished particulars.
The credit of TCS to a person other than the collectee — such as a parent in the case of a minor collectee, when the minor’s income is clubbed with that of the parent has also been allowed.
Accordingly Vide CBDT Notification No. 114/2024 dated 16.10.2024 Rule 37-I of the Rules has been amended to allow credit of tax collected at Source to a person other than the collectee, in whose hands the income of the collectee is assessable.
Individual LRS limit is USD 250,000, requiring an additional 20% for TCS (earnings) for investments exceeding USD 100,000, initially deducted upfront and adjusted with final tax liability and filing. The tax filing deadline is July 31, the following year, and refunds will only be processed 2-3 months after that date.
Budget 2024 introduced TCS credit for TDS deducted from wages, reducing tax burden, shortening return delays, and preventing excess cash outflow in overseas investments.
The 2024 budget outlines a 20% TCS deduction upfront, but salaried employees can offset this against the TDS deduction, which will be deducted from their salary.