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Central Board of Direct Taxes (CBDT) notifies Form 12BAA enabling the employees to offset TDS/TCS credit against tax deductible under S.192(1)
Section (S.) 192(2B) of the Income Tax Act (ITA) permits employer to consider other income (including House Property loss but not any other loss) and corresponding tax deducted at source (TDS) reported to employer while deducting tax on Salary income. Rule 26B prescribes a statement with self-verification of truth to be furnished by the employee to employer reporting the particulars of other income and TDS thereon.
S.192(2B), prior to amendment vide Finance (No.2) Act (FA) 2024, did not specifically permit consideration of TDS not related to income (like TDS on cash withdrawals) and Tax collected at source (TCS). Expansion of scope of TCS by earlier Finance Acts to foreign remittances under Liberalised Remittance Scheme, Overseas Tour Program Package and purchase of high value motor cars (> INR 1m) resulted in many employees suffering TCS but not able to correspondingly reduce Salary TDS resulting in requirement to claim refund by filing return of income. In the wake of representations received in this regard, FA 2024 amended S.192(2B) w.e.f. 1 October 2024 to enable the employee to furnish to the employer, particulars of, inter alia, TDS and TCS in such form and verified in such manner as may be prescribed for salary TDS purposes.
Following the statutory amendment enabling employees to offset other TDS/TCS against Salary TDS, CBDT vide its Notification[1] has substituted Rule 26B and prescribed Form 12BAA for employee to furnish to the employer relevant details of TDS, TCS and loss under the head “Income from house property” along with self-verification of truth. Corresponding changes are also made in Form 24Q (quarterly Salary TDS reporting form) and Form 16 (annual Salary TDS certificate) so as to enable the employer to act upon Form 12BAA furnished by employee for offset of other TDS/TCS against Salary TDS. The amendment to Rule 26B is effective from 15 October 2024.