Finance minister Nirmala Sitharaman announced changes in the Tax Deducted at Source (TDS) framework which will impact salaried individuals. The tweaks will impact disposable income and streamline tax processes, the Finance minister announced, adding, "A beginning is being made in the Finance Bill by simplifying the tax regime for charities, TDS rate structure, provisions for reassessment and search provisions and capital gains taxation."
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Here are four changes in TDS provisions announced by Nirmala Sitharaman that will impact you:
Salaried individuals can claim credit for TCS collected
Section 192 of the Act provides deduction of tax at source on salary income. Nirmala Sitharaman announced that all TCS paid and TDS deducted under all other sections will also be considered for TDS deducted on salary income by amending the existing provisions. This will put more money in the hands of salaried employees from October 1, 2024 when the amendments will take effect.
TDS on sale of jointly held property
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Till now there was a deduction of tax on payment of sale consideration for the sale of immovable properties other than agricultural land. This rule has been ambiguous in the case of multiple buyers or sellers where the sale value of the immovable property or stamp duty value exceeds ₹50 lakh. This Finance Bill has clarified that the exemption is only when the total sale value is less than ₹50 lakh and where there is more than one seller or buyer.
Lower TDS on rent paid
An individual or a Hindu undivided family who pays rent exceeding ₹50,000 for a month or part of a month is required to deduct TDS equivalent to an amount of 5 per cent. The Finance Bill has proposed for reduction in the applicable rate of TDS from 5 per cent to 2 per cent.
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TCS of minor can be claimed by the parent
{{/usCountry}}An individual or a Hindu undivided family who pays rent exceeding ₹50,000 for a month or part of a month is required to deduct TDS equivalent to an amount of 5 per cent. The Finance Bill has proposed for reduction in the applicable rate of TDS from 5 per cent to 2 per cent.
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TCS of minor can be claimed by the parent
{{/usCountry}}TCS collected in the name of a minor can only be claimed in the name of the minor but the Budget has provided for the adjustment of TCS credits in the name of the minor with the tax liability of the parent which can be done only when the income of the minor is clubbed in the hands of the parent.