The purpose of this form is to reduce the TDS deduction from the salary of the employee. This step will increase the savings of the employees. Form 12BAA acts as a statement which provides a statement for sub-section (2B) of section 192 of the Income Tax Act.
Now if more TDS is deducted on your income other than salary, then you can reduce it through a form. For this, you just have to fill a form and give it to your employer and tell how much income or foreign remittance other than your salary has come into your account. The Central Board of Direct Taxes (CBDT) has released Form 12BAA, which aims to improve the disclosure of non-salary income and provide details of TCS (Tax Collected at Source). This initiative is as per the guidelines laid down in the Union Budget 2024.
The purpose of this form is to reduce the TDS deduction from the salary of the employee. This step will increase the savings of the employees. Form 12BAA serves as a statement that provides details for sub-section (2B) of section 192 of the Income Tax Act. Employees are now required to use this form to inform their employer about deductions made from income sources other than their salary.
These sources can include income from fixed deposits, insurance commission, dividends from equity investments, and taxes collected during significant purchases such as buying a car or foreign currency. This new form is an essential tool for employees, enabling them to present a more comprehensive financial picture to their employer.
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How will it benefit?
Through this form, employees will be able to inform their employer that tax has been deducted in the form of TDS from sources of income other than their salary, such as fixed deposits (FD), insurance commission, or share dividends.
If an employee has made a big purchase or payment in foreign currency and TCS has been deducted on it, then it can be informed in this form. Submitting this information to the employer in Form 12BAA will reduce the TDS deduction from salary.
TDS details
- Under which section TDS was deducted
- Name and address of the person deducting TDS
- TAN number of the person deducting TDS
- Amount of tax deducted under TDS
- Information about the income on which TDS was deducted
TCS details
- Under which section TCS was collected
- Name and address of the person collecting TCS
- TAN number of the person collecting TCS
- Total amount of TCS deducted
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