Taxpayers filing TDS returns for Q4 (Form 24Q) and claiming standard deduction under section 16(ia) for Section 115BAC cases faced an error message.
The error message states that standard deduction under section 16(ia) is not applicable when taxation under Section 115BAC is opted.
The clarification states that as per the department’s file format, from FY 23-24 onwards, standard deduction u/s 16(ia) can be claimed for 115BAC cases also. The Income Tax department has been informed about the issue and a fix is expected in the next FVU release.
Tax Deducted at Source (TDS) represents a form of advance tax deducted from an individual’s or an organization’s earnings before the actual crediting of funds into the respective account, as per the Indian Taxation Code. Through TDS, the government garners revenues by enforcing deductions on both individual and business earnings. The regulations governing TDS are overseen by the Central Board of Direct Taxes (CBDT) under the Income Tax Act of 1961.
The essence of “Tax Deducted at Source” lies in the deduction of tax by the payee or employer prior to disbursing payment to the recipient. This mechanism applies to both regular and irregular income. TDS is relevant to a range of incomes, encompassing Salary, Commission, Rent, Professional Fees, and Interest.
The TDS process is managed through various return forms like 24Q, 26Q, 27Q, and 27EQ. Its benefits include:
1. Preventing tax evasion by deducting tax at the source.
2. Ensuring timely and proper tax collection.
3. Expanding the tax base by encompassing a large number of individuals.
4. Providing a steady revenue stream for the government.
Form 24Q is utilized to generate eTDS returns for the TDS deducted on salary under Section 192 of the Income Tax Act, 1961. This form must be submitted quarterly by the deductor and includes information such as salaries paid and TDS deducted from employees by the employer.
It comprises two annexures: Annexure-I and Annexure II. Annexure-I encompasses details of the deductor, deductees, and challans, while Annexure II covers the salary specifics of the deductees.
Deductors are required to submit Annexure-I for all four quarters of the financial year. However, Annexure II does not need to be submitted in the initial three quarters but must be provided and submitted in the fourth quarter, including details of employees’ salaries for the entire financial year.
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