• Personal Taxation

Ease in Claiming Credit for TCS Collected/TDS Deducted for Salaried Employees

  Published In :  EvoBreyta   Download  

 Author :  Navneet Singal

Ease in Claiming Credit for TCS Collected/TDS Deducted for Salaried Employees 

 

Central Board of Direct Taxes (CBDT) has notified amendments in income-tax rules for ease in claiming:

(I)        Credit for TCS collected/TDS deducted for salaried employees for non-salaried income, e.g., interest income (TDS) and foreign payments for travel or children education etc. (TCS)

(II)          TCS credit of minors in the hands of parents. (where the collectee is the minor son/daughter and his/her income is clubbed with his parents) 

The CBDT has made amendments vide notification

(a)    No. 112/2024/F. No. 370142/19/2024-TPL, Dated: 15.10.2024

(b)   No. 114/2024/F. No. 370142/21/2024-TPL, Dated: 16.10.2024

Further, the CBDT has also issued the press release to provide clarification regarding the purpose of these amendments.

(the above-mentioned notifications and press release is enclosed with this blog)

 

Credit for TCS collected/TDS deducted for salaried employees

This amendment will provide relief to salaried taxpayers by allowing consideration of TDS/TCS on non-salary income. The key highlights are:

• Salaried individuals could claim credit of TDS/TCS suffered on non-salary income at the tax withholding stage by declaring its particulars to the employer.
• Employer shall give credit of such TDS/TCS while computing TDS on salary.
• This would ease the cash outflow issues for salaried individuals by lowering their overall tax burden at the salary tax withholding stage itself.

TCS credit of minors in the hands of parents

Further, sub-section (4) of Section 206C of the Act was amended vide FA (No. 2) to allow the credit of No. 114/2024/F. No. 370142/21/2024-TPLTCS 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. 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.