Take away Salary to increase: Budget 2024 proposes Less TDS deduction if TCS collected

Claiming credit for Tax Collected at Source (TCS) and Tax Deducted at Source (TDS) has been a significant concern for salaried employees. This process often involves complications. These can lead to cash flow issues and additional compliance burdens. Recent proposals aim to simplify this procedure making it easier for employees to manage their taxes.

Currently under sub-section (28) of section 192 of Income Tax Act, income under any head and tax deducted thereon is considered for making deductions under sub-section (1) of same section. This is only under certain conditions. However employees have faced difficulties because credit for TCS paid is not always considered. This happens when computing tax to be deducted from salary. This exclusion necessitates employees to claim refunds. This adds to compliance process and often causes cash flow problems.

To address these issues it has been proposed sub-section (28) of section 192 be amended. This amendment aims to expand the scope of this sub-section. It would include any tax deducted or collected under provisions of Chapter XVII-B or Chapter XVII-BB. This inclusion would mean that all taxes deducted at source (TDS) and taxes collected at source (TCS) would be taken into account. This consideration is when calculating tax to be deducted from the employee’s salary.

The proposed changes are expected ease compliance for employees by:

1. Reducing need for employees to claim refunds for TCS and other TDS amounts. This simplifies their tax filing process.

2. Preventing cash flow issues. This ensures all taxes collected or deducted are considered upfront.

3. Streamlining overall process of tax deduction. Making it more efficient. And less burdensome for salaried employees.

These amendments are set to take effect from October 1 2024. Once implemented employees can expect smoother experience in managing their tax deductions. With less paperwork. And a more straightforward process for claiming tax credits.

The proposed amendments to section 192 of Income Tax Act reflect significant step towards simplifying tax compliance for salaried employees. By considering all forms of tax deductions. And collections the amendments aim to alleviate cash flow issues. Reduce complexity of tax filing process. This change is anticipated to provide much-needed relief to employees. Making it easier for them to manage their taxes efficiently.