The Central Board of Direct Taxes (CBDT) has recently notified vide Notification No. 112/2024, dated October 15, 2024 introduction of a new Form 12BAA, to help salaried individuals inform their employers for tax already deducted (TDS) from other streams of income or collected (TCS). This is in line with the changes proposed in the Union Budget 2024 and aims to simplify the process of offsetting Tax Deducted at Source (TDS) from both salary and non-salary income sources.
This comes into effect from October 1, 2024.
What is the New Tax Form 12BAA?
Form 12BAA allows employees to report TDS / TCS derived from income sources other than salaries – such as interest from fixed deposits, commissions from insurance policies, dividends from equity shares, and taxes collected during purchases of goods or services, like cars or foreign currency.
Content of New Form 12BAA
Employee Details:
- The identity of the Employee – PAN, Name, Address
- Financial Year
TDS Details:
- Section under which tax was deducted
- Name of the deductor
- Address of the deductor
- TAN of the deductor
- Amount of tax deducted
- Amount of income received / credited
- Any other relevant details
TCS Details:
- Section under which tax was collected
- Name of the collector
- Address of the collector
- TAN of the collector
- Amount of tax collected
- Any other relevant details
Additionally, the form includes a section to report losses under ‘Income from House Property’ with fields for amount and other relevant details. Finally, the employee is required to verify the accuracy of the information in the form by placing his signature.
How Does Form 12BAA Benefit Employees?
Historically, employers have been reporting the ‘Income from sources other than Salary’ but there was no provision for report TDS or TCS from other sources. This was leading to either non-reporting of such transaction or, if reported, it was a times amounting to additional deductions by the employee.
The new reporting method would benefit the employee to report their income and the TDS / TCS so that the employer can determine the correct TDS on Salary.
Changes in Form 16
Before the determining the “Net Tax Payable”, following amounts would be additionally subtracted:
- TDS at per Form 12BAA submitted under provisions of Section 192(2B)
- TCS at per Form 12BAA submitted under provisions of Section 192(2B)
Download the Official Notification
To read the full details of Notification No. 112/2024, dated October 15, 2024, you can download the official document from the following link:
Download Notification Document