The Income Tax Department has released a new version of the File Validation Utility (FVU) to validate TDS/TCS returns before submission. This update introduces several enhancements and changes, effective from FY 2024-25, aimed at improving compliance and accuracy in TDS/TCS reporting. These are summarized as under:
1. Form 24Q – Annexure II (Salary Details)
- A new column has been added to report TDS/TCS deductions from other sources (apart from the employer) for each employee.
- This change will help avoid excess TDS deductions by employers and ensure accurate tax liability of the employee.
2. Form 24Q – Standard Deduction Update
- The Standard Deduction for salaried individuals has been increased from ₹50,000 to ₹75,000, effective FY 2024-25.
- The revised limit will be reflected in both Annexure II (Salary Details) and Annexure III of Form 24Q.
3. TDS on Repurchase of Mutual Funds/UTI (Section 194F)
- TDS on the repurchase of units by Mutual Funds/UTI under Section 194F has been removed with effect from October 1, 2024.
- Taxpayers and entities should take note of this exemption for transactions occurring from this date.
4. Section 206(12) – Relief for Specific Entities
- Relief has been provided to specific entities, such as those exempted from income tax, for non-collection of taxes (TCS).
- A new remark ‘J’ is to be added for Collection Codes A, B, C, D, E, I, J & L, indicating no or lower collection for eligible entities.
5. Section 194Q & Section 206(1H) – Lower TDS/TCS on Purchase/Sale of Goods
- Previously, there was no provision for lower TDS/TCS for transactions related to Purchase of Goods or Sale of Goods and the full rate of TDS or TCS was applicable.
- From FY 2024-25, Q3 onwards, provision has been introduced for no-deduction/collection or lower-deduction/collection.
- To claim this benefit, the transaction should be reported with Remarks ‘A’.
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TDSMAN has been fully updated with newly released File Validation Utilities.
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