This article discusses the key modifications in TDS Return Form 24Q for all salaried individuals. The government from October 1, 2024, mandated employers to regard the TDS/TCS deducted on non-salary income when calculating TDS on salary.
The motive of this adjustment is to lessen the additional TDS deductions often faced by salaried employees by ensuring that the tax filed before on non-salaried income is accounted for. In 2024, this legal change was introduced implementing the significant technical infrastructure took time.
These updates were integrated into the TDS software as of December 27, 2024, ensuring precise TDS certificates from Q4 of FY 2024-25 onwards, Protean (formerly NSDL e-Governance) confirmed. It ensures that the employees will take advantage of the precise TDS calculations and certificates for the remainder of FY 2024-25.
Key Changes Effective from January 2025
Below we have discussed the major key changes in TDS Return form 24Q for salaried persons:-
TDS/TCS Adjustment on Non-Salary Income
Now the employers incorporate the tax already deducted or collected on the non-salary income on the TDS computing for salaries. The very changes have ensured that the employees are not under double taxation or over-deduction. For example, if a salaried person makes an additional freelance income where the TDS has been deducted before, then the employer will adjust the same while calculating the salary TDS, resulting in a lower TDS liability.
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For instance: Let us consider that an employee earns ₹15,00,000 annually from their primary job and ₹3,00,000 in freelance income, from which ₹30,000 TDS has already been deducted. As per the new system, the employer will calculate TDS on the total income of ₹18,00,000 while accounting for the ₹30,000 TDS already paid, directing in a lower overall TDS deduction.
Improved Form 24Q Reporting
Form 24Q amendment comprises-
Column 388A
A new column has been introduced to report TDS/TCS deducted via other deductors or collectors u/s 192(2B), ensuring a detailed breakdown of all taxes deducted on income.
Column 388 (Previously Column 375)
The very column has been renumbered and renamed to report TDS deducted via other employers on income along with the total taxable salary.
Such enhancements shall ease the compliance for the employers and rectify the clarity for the tax authorities.
Surged Standard Deduction for NTR
Employees get the advantage via a surged standard deduction of ₹75,000, up from ₹50,000 who have chosen the new tax regime. The employers are required to update the payroll systems to show the same amendment and ensure the compelling deduction application.
Submission of Form I-T 12BAA
The employees are required to Submit Form 12BAA to their employers to claim for the lower TDS deductions showing any other deductions or exemptions under the new tax regime. The same ensures that the employers can adjust the TDS deductions in compliance with the Notification No. 112/2024-Income Tax, issued on October 15, 2024.
Revamped Tools for Precise Tax Compliance
Protean’s updated Return Preparation Utility (RPU) version 5.4 and File Validation Utility (FVU) version 8.9 became functional in December 2024. Such tools shall assist employers in filing precise TDS returns, incorporating the updated provisions in Form 24Q. From the official Protean website (https://www.protean-tinpan.com/services/etds-etcs/etds-rpu.html) the new RPU can be downloaded.
TDS Certificates Updated
From Q4 of FY 2024-25 onwards the issued TDS certificates will show the updated amendment in the process of TDS calculation. Such certificates shall furnish the employers with a precise record of tax deductions that would be significant at the time of income tax return (ITR) filing.
Effect on Employees and Employers
For Employees: The updated TDS framework provides an advantage to the employees via diminishing over-deduction and rising take-home pay. For non-salary income TDS adjustments inclusions ensure that the person is taxed accurately, enhancing their cash flow.
For Employers: Employers will required to:
- Adjust salary TDS computations to account for any TDS/TCS deducted from non-salary income.
- To incorporate the changes in TDS calculations and standard deductions, update payroll systems.
- For precise filing and reporting, utilize the new TDS software.
The employers shall be required to confirm that the employees submit Form 12BAA to claim the lower TDS deduction under the updated tax regime.
Closure: The TDS amendments w.e.f January 2025 not major signifies an influential measure to improve the efficiency and precision of tax deductions for salaried employees. These amendments ease the tax deduction method by incorporating the TDS/TCS on non-salary income which lessens the financial load on the employees and assists in improving the spending ability of the people via enhancing their take-home pay.
The employers are mandated to take on the new tools and software updates to file their TDS returns appropriately, employees are needed to stay proactive in notifying their employers for the other income and filing Form 12BAA for lower TDS deductions. Through comprehending such updates and adapting both employers as well as employees are enable to govern the new TDS framework, ensuring compliance and maximizing tax efficiency.
