CBDT Notifies 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
The Central Board of Direct Taxes (CBDT) has recently notified key amendments aimed at simplifying the process for salaried employees to claim Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) credits. These amendments, introduced through the Finance (No. 2) Act, 2024, focus on easing the tax credit process for salaried individuals and enable parents to claim TCS credits for their minor children.
Amendments to Section 192 (2B) for Salaried Employees
Section 192 (2B) of the Income-tax Act, 1961, has been amended via the Finance (No. 2) Act, 2024. This change now includes any TDS or TCS deductions made under Chapter XVII-B or Chapter XVII-BB in the tax deduction process for salaried employees. As per CBDT Notification No. 112/2024 dated 15.10.2024, the Income-tax Rules, 1962 have been updated with the introduction of Form No. 12BAA. This form serves as the prescribed statement of particulars that employees must submit to their employers.
Employers are required to consider the details provided by employees in Form No. 12BAA when making salary payments under Section 192 (1) and adjust TDS deductions accordingly. This ensures that any TDS or TCS already deducted from other sources is considered in the overall tax liability computation for salaried employees.
Amendment to Section 206C (4) for Parents of Minors
In another significant amendment, Section 206C (4) of the Income-tax Act has been revised through the Finance (No. 2) Act, 2024. This change permits the transfer of TCS credit to a person other than the collectee, such as the parent, in cases where a minor’s income is clubbed with the parent’s for tax purposes.
To implement this, the CBDT has issued Notification No. 114/2024 dated 16.10.2024, which amends Rule 37-I of the Income-tax Rules, 1962. Under the new provision, parents can now claim TCS credit for their minor children’s income that is clubbed with their own, simplifying the tax process and ensuring that TCS is credited to the correct taxpayer.
Conclusion
These amendments represent a significant step towards streamlining the tax credit process for both salaried individuals and parents of minors. By introducing Form No. 12BAA and amending the rules for TCS credit, the CBDT has made it easier for taxpayers to claim TDS/TCS credits efficiently, reducing complexities and improving compliance.
Taxpayers should be aware of these changes and ensure they submit the required forms and details to their employers or, in the case of minors, claim the relevant TCS credit in a timely manner.
To Access the official press release of CBDT dated 16th October 2024 Click Here
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Refer CBDT Notification No. 112/2024 dated 15.10.2024
Refer CBDT Notification No. 114/2024 dated 16.10.2024
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