365Telugu.com online news, November 10th,2024 : The Finance Ministry has recently updated Income Tax regulations, streamlining the process for salaried taxpayers to claim credits for Tax Collected at Source (TCS) and Tax Deducted at Source (TDS).
On October 15, the Central Board of Direct Taxes (CBDT) issued a notification that amends the Income Tax Rules, 1962, and introduces a new Form, 12BAA. This amendment enables parents to claim TCS credits on behalf of minor children whose income is reported jointly with the parents’. In line with the Finance Act, 2024, Subsection 2B of Section 192 of the Income Tax Act, 1961, has also been revised, ensuring salaried employees can access TDS and TCS deductions under Chapter XVII-B or Chapter XVII-BB.
Employers’ Role in the New Process
Employers now need to use Form 12BAA to calculate TDS on employees’ salaries. Employees must provide this form to their employers to ensure accurate TDS and TCS credits based on the information they supply.
Additionally, an amendment to Subsection 4 of Section 206C allows individuals other than the primary income earner to claim TCS credit. For example, parents can claim TCS credit on behalf of their minor children by reporting the income under the parent’s PAN.
Simplified Process for Taxpayers
The revised rules aim to ease taxpayers’ financial burdens by reducing their income tax liabilities. To transfer TCS credit, taxpayers will need to submit a declaration to the tax-collecting institution, including PAN, name, and address of the person to receive the credit, along with payment details and reason for the transfer.
Significant Growth in Direct Tax Collection
Over the past decade, direct tax collections have surged by 182%, totaling ₹19.60 lakh crore in FY 2023-24. During this time, corporate tax collections doubled to ₹9.11 lakh crore, while personal income tax collections almost quadrupled to ₹10.45 lakh crore.
These updates represent the government’s ongoing efforts to simplify tax processes and improve compliance while addressing taxpayers’ needs for a smoother experience.