Nirmala Sitharaman in Budget: During the budget presented in July, Finance Minister Nirmala Sitharaman had talked about adjusting the TDS and TCS deducted from the salary. After this, a new form has been issued by CBDT.
TDS New Rule: If you belong to the salaried class and your TDS is deducted every month, then this news is of use to you. Yes, to implement the announcement made by Finance Minister Nirmala Sitharaman in the Budget 2024 presented in July, CBDT has issued a new form 12BAA. In this, it was said to adjust the TDS and TCS deducted from the salary. This form will be used by the employees to give information to the employers about tax deduction from sources other than their salary. Under this, information about FD, insurance commission, dividend from equity shares and purchase of car etc. can be given.
Tax deduction from salary can be reduced
Employers usually deduct TDS from salary based on the investment declaration made by the employee. Investment and expenditure are taken into consideration for tax deduction. But employers did not adjust the tax paid by the employee for other things. But now it will be necessary for the employer to see how much tax the employee has paid at other places, TDS can be deducted from the employee’s salary accordingly. Through the new form, the employee can reduce the tax deduction from his salary by giving information about TCS and TDS deduction to his employer. This will give the employee more money to spend and their saving habit will increase. CBDT has released a new form by issuing a notification on October 15.
New rule came into effect from 1 October 2024
The law related to giving information to the employer about TCS and TDS deductions in other items has come into effect from October 1, 2024. Now the employee can give information to his employer about the TDS deducted from other sources of income. After the release of the new form related to TDS, tax expert Ashish Mishra says that after its implementation, if an employee wants to reduce the tax deducted from the salary and increase the take-home, then he can give information to his employer about the tax deducted from any other income source through Form 12BAA. The new Form 12BAA is similar to Form 12BB, which is used by the employee to make investment related declaration to the employer.
As per the Income Tax rules, an employer has to deduct tax from the salary paid to the employee under section 192 of the Income Tax Act. Tax will be deducted based on the tax regime chosen by the employee. The employee is free to choose either the old or the new tax regime. Under the old tax regime, any person can claim tax exemption under section 80C, 80D, HRA, Leave Travel Allowance (LTA) etc. Apart from this, the new tax regime allows standard deduction and contribution to NPS account to reduce TDS from salary.
