TDS relief for salaried: From January 1, 2025 this tax statement will reflect the net TDS/TCS benefit on eligible income
From October 1, 2024 the government has made it mandatory for employers to give benefits of TDS/TCS deducted on non-salary income while computing TDS to be deducted from salary. Adjustment of tax already paid through TDS/TCS on non salaried income while deducting TDS against salary can bring down TDS liability for a salaried employee. This amendment was introduced to reduce the incidence of extra TDS being deducted from salary income. While the law was already implemented, the necessary back end technical infra updation took time.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
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Protean (formerly NSDL e-Governance) has informed that the necessary changes have been made in the TDS software from December 27, 2024 and now the TDS certificate will start reflecting the updated changes for Q4 of 2024-25 TDS statement onwards.
Salaried to be eligible for lower TDS deduction from January 2025?
Mihir Tanna, associate director, S.K Patodia LLP says the correct wording to be used here is salaried employees become eligible for normal TDS deduction instead of extra deduction. While the extra TDS stopped getting deducted from October 1, 2024 itself, the TDS certificate will start showing this effect from Q4 of FY 2024-25 which starts from January 2025.Tanna says before October 1, 2024 salaried employees had to pay TDS on non-salary income twice. He says: "Suppose if your salary is Rs 10 lakh and other income where TDS or TCS is deducted or collected is Rs 5 lakh. So earlier employers had to deduct TDS on Rs 15 lakh income in full irrespective of the fact that TDS or TCS was deducted or collected from that Rs 5 lakh income. Now after this amendment TDS will be deducted by the employer on Rs 15 lakh after giving benefit of TDS/TCS already deducted or collected on that Rs 5 lakh income. So the overall TDS amount to be deducted will go down."
Tanna says the government has given this benefit to salaried employees to enable them to claim credit of TDS/TCS incurred on non-salary income at the tax withholding stage itself if it's declared to the employer. "This will help reduce the incidence of extra TDS deduction and also reduce the cash flow problems of employees," says Tanna.
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As Per CA Ashish Niraj, Partner, A S N & Company, Chartered Accountants, says due to this amendement in Form 24Q and Form 16 will improve and TDS deduction will be become more accurate. "Employees will furnish their other income more accurately by which their TDS may change according to actual income. It will also include Loss under the head “Income from house property”. By this the TDS of employees will increase or decrease on case to case basis.”
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What did Protean say about updated TDS software?
Protean said in a circular dated December 26, 2024, "Attention of all TIN-Facilitation Centres (TIN-FCs) is hereby invited to the TDS/TCS Return Preparation Utility (RPU) & File Validation Utilities (FVU). The existing RPU and FVU utilities have been revised and the versions of the revised RPU and FVU are as follows:Amendments introduced to TDS Form 24Q, 26Q and 27EQ
1) Addition of a New Column (388A): A new column (388A) has been added under Annexure II (Salary details) for Form 24Q. This amendment is applicable to statements pertaining to FY 2024-25 Q4 onwards."As per the updated TDS Form 24Q the newly inserted column 388A will show amount reported as per section 192(2B), of other tax deducted at source or tax collected at source, other than (388).
Column 388 is meant to show reported amount of tax deducted at source by other employer(s) (income in respect of which included in computing total taxable income in column 339).
"2) Increase in Standard Deduction: Standard deduction has been increased from Rs 50,000 to Rs 75,000 under Annexure II (Salary details) and Annexure III. This change is applicable only under the new tax regime for statements pertaining to FY 2024-25 Q4 onwards.
3) Change in Column Name and Number: Changes have been made to the name and number of an existing column under Annexure II (Salary details) for Form 24Q, effective from FY 2024-25 Q4 onwards.
4) Omission of an Existing Section Code: Section code 194F has been omitted from Form 26Q, applicable to statements pertaining to FY 2024-25 Q3 onwards.
Section under which Tax has been deducted/collectedApplicable remark valueApplicable for Form Type Applicability of FY and Quarter194Q- Payment of certain sums for purchase of goodsA: Remark (reason for non-deduction / lower deduction/ Higher Deduction) 26Q2024-25 Q3 onwards206C-R- Collection at source on sale of goodsA: Remark (reason for non-collection / lower collection)27EQ2024-25 Q3 onwardsSource: TIN circular
5) Changes in Applicability of Remark Values: Section under which Tax has been deducted/collected Applicable remark value:
Existing column name (375) Revised column name (388) Reported amount of tax deducted at source by other employer(s)/deductor(s) (income in respect of which included in computing total taxable income in column 13)Reported amount of tax deducted at source by other employer(s) (income in respect of which included in computing total taxable income in column 13)Source: TIN circular
6. Addition of New Remark Value (J): A new remark value 'J' has been introduced if no collection or lower collection is in view of notification issued under sub-section (12) of section 206C. This applies to Form 27EQ for statements pertaining to FY 2024-25 Q3 onwards. o This remark is applicable to collection codes A, B, C, D, E, I, J and L."
"Return Preparation Utility (RPU) version 5.4 and File Validation Utility (FVU) versions as stated above are applicable with effect from December 27, 2024 onwards and same are hosted on Protean website. The said RPU & FVU can be downloaded from the following URL https://www.protean-tinpan.com/downloads/e-tds/eTDS-download-regular.html. All TIN-FCs are advised to note that e-TDS/TCS statements validated with FVU versions lower than 8.9 or 2.185 will not be accepted at Online SAM from December 27, 2024," TIN said in the circular dated December 26, 2024.
Niraj says: “New Column 388A has been inserted under Annexure II in Form 24Q to give effect to the Income-tax (Eighth Amendment) Rules, 2024 vide Notification No. 112/2024-Income Tax Dated 15th October, 2024. Now After 12BA ,a new form 12BAA will be inserted which will contain the statement showing particulars for the purpose of Section 192(2B) to furnish particulars of income under any head other than "Salaries" and deduction of tax at source thereof to his employer so that it can be included in taxable income."
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This story originally appeared on: India Times - Author:Faqs of Insurances
