Budget 2024: The TCS credit against TDS on salary is a toothless provision

livemint.com:

₹30 lakh, and other income of ₹1.5 lakh, on which there is TDS of ₹10,000. On the salary, his TDS would be about ₹5.75 lakh. If he has spent ₹5 lakh on a foreign tour, TCS of ₹1 lakh would also have been paid by him.

Prior to the amendment, he would compute the tax payable on his other income of ₹45,000 (ignoring cess), and not pay advance tax of ₹35,000, which would otherwise be payable given the fact that TCS of ₹1 lakh has already been paid by him. While filing the return of income, he would claim a refund on the excess TCS of ₹65,000 over and above his net tax liability. After the amendment, he would declare the other income of ₹1.5 lakh, TDS of ₹10,000, and TCS of ₹1 lakh to the employer.

The employer would continue to deduct TDS of ₹5.75 lakh on the salary income. The employee would then file his tax return and claim a refund on the excess TCS of ₹65,000 over and above his net tax liability. Effectively, no difference! This is another instance of what we have been seeing happening over the years—the announcement of an amendment with so-called benefit to taxpayers, but wording the provision in such a manner that really no benefit flows to taxpayers at all.

Taxpayers these days are far better informed, and would sooner or later realise how they are being taken for a ride. The least one expects is that if really no benefit is being provided, please don’t announce it as a benefit. What purpose do such amendments serve other than making the law complicated? If this is really a drafting mistake can one expect that while passing the budget, the so-called benefit announced for taxpayers is implemented in reality by amending the proposal so that TDS on salaries can actually be reduced? That would be the true test of whether