Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024

Section 192 of the Act provides for deduction of tax at source on salary income. Further, sub-section (2B) of section 192 of the Act provides for consideration of income under any other head and tax, if any, deducted thereon to be taken into account for the purposes of making the deduction under sub- section (1) of the aforesaid section, subject to certain conditions.

2. Representations have been received that credit of TCS paid should be allowed while computing the amount of tax to be deducted on salary income of the employees as this will help in avoiding cash flow issues for employees. Similarly, all TDS may be taken into account for the purpose of deduction of tax from the salary income of employees. Moreover when the TCS etc is not taken into account, the same is required to be claimed as a refund by the employee which adds to the compliance process.

3. In order to ease compliance, it is proposed that sub-section (2B) of section 192 may be amended to expand the scope of the said sub-section to include any tax deducted or collected under the provisions of Chapter XVII-B or Chapter XVII-BB, as the case may be, to be taken into account for the purposes of making the deduction under sub-section (1) of section 192.

4. The amendments will take effect from the 1st day of October, 2024.

[Clause 50]

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Full Text:

Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024

Tax credit for collected or deducted tax: salaried employees may use such credits to reduce salary TDS, easing compliance. Amendment modifies the rule for computing tax to be deducted from salary so that any tax deducted or collected under the statutory collection-at-source and related withholding regimes is taken into account when determining salary tax deduction, thereby reducing cash-flow impacts on employees and the need to claim refunds; effective from 1 October 2024.