How salaried taxpayers can increase their take-home pay after this rule change
Subscribe to enjoy similar stories. NEW DELHI : October 2023-24 brought a tax shocker. The rate of tax collected at source (TCS) on the purchase of foreign tour packages and foreign remittances under the Liberalised Remittance Scheme (LRS), other than for education and medical purposes, was raised from 5% to 20%.
Though this additional TCS outflow could be claimed as a refund, it could only be done at the time of filing the income tax return. However, October 2024-25 has brought good news for all salaried taxpayers. The Union Budget 2024-25 amended section 192 of the Income Tax Act.
As per this amendment, which became effective on 1 October 2024, salaried taxpayers will now be able to claim the benefit of offsetting the TCS collected by banks and other authorized dealers on their foreign tour packages and foreign remittances under the LRS against the amount of tax deducted at source (TDS) from their salary by their employers. To enable the salaried taxpayers to claim the benefit of TCS credit adjustment against the TDS on their salary, the apex body, Central Board of Direct Taxes (CBDT), has introduced a new Form 12BAA under the amended Income Tax Rule 26B, effective from 15 October. Form 12BAA is simple and user-friendly.
Employees must furnish it to their employers to claim the TCS credit against the TDS to be deducted under section 192. In addition to the TCS credit, employees can also claim the benefit of offsetting the TDS deducted from their non-salary incomes, such as dividends, commissions, interest and rental income, against the TDS deductible on their salary through this form. Further, the loss against house property can also be claimed in the computation of TDS deductible on their salary through this form.
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