GUWAHATI: The Central Board of Direct Taxes (CBDT) has recently issued new amendments to income-tax rules, simplifying the process for salaried employees to claim Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) credits. These updates also allow parents to claim TCS credits on behalf of their minor children.
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Under the Finance Act (No. 2) of 2024, sub-section (2B) of Section 192 of the Income-tax Act, 1961, has been revised to include any TDS or TCS collected under Chapters XVII-B and XVII-BB of the Act. This change enables salaried employees to receive TDS credit, making it easier for them to claim tax benefits based on these deductions.
As part of these changes, the CBDT introduced Form No. 12BAA, announced in Notification No. 112/2024 on October 15, 2024. This form is essential for employees to declare any TDS or TCS deducted from their income. They must submit this form to their employers, who then calculate TDS on the salary after considering the details provided. This adjustment helps ensure accurate tax deduction for salaried individuals, minimizing the chances of overpayment.
Additionally, CBDT Notification No. 114/2024, dated October 16, modifies Rule 37-I, allowing the transfer of TCS credit to a parent or guardian. This change is especially beneficial for parents of minors, as it enables them to claim TCS credits when the minor’s income is clubbed with their own for tax assessment. This new rule reduces administrative hurdles for families with minor dependents, streamlining the tax process for both the taxpayer and the Income Tax Department.