From October 1, 2024 the government has made it mandatory for employers to give benefits of TDS/TCS deducted on non-salary income while computing TDS to be deducted from salary. Adjustment of tax already paid through TDS/TCS on non salaried income while deducting TDS against salary can bring down TDS liability for a salaried employee. This amendment was introduced to reduce the incidence of extra TDS being deducted from salary income. While the law was already implemented, the necessary back end technical infra updation took time.
Protean (formerly NSDL e-Governance) has informed that the necessary changes have been made in the TDS software from December 27, 2024 and now the TDS certificate will start reflecting the updated changes for Q4 of 2024-25 TDS statement onwards.
Salaried to be eligible for lower TDS deduction from January 2025?
Mihir Tanna, associate director, S.K Patodia LLP says the correct wording to be used here is salaried employees become eligible for normal TDS deduction instead of extra deduction.
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Tanna says before October 1, 2024 salaried employees had to pay TDS on non-salary income twice. He says: “Suppose if your salary is Rs 10 lakh and other income where TDS or TCS is deducted or collected is Rs 5 lakh. So earlier employers had to deduct TDS on Rs 15 lakh income in full irrespective of the fact that TDS or TCS was deducted or collected from that Rs 5 lakh income. Now after this amendment TDS will be deducted by the employer on Rs 15 lakh after giving benefit of TDS/TCS already deducted or collected on that Rs 5 lakh income. So the overall TDS amount to be deducted will go down.”