To implement the Budget 2024 announcement regarding the adjustment of TDS and TCS from other sources against salary TDS, the Central Board of Direct Taxes (CBDT) has issued a new form called Form 12BAA.

This form will be utilized by employees to report to their employers the tax deductions from sources other than their salaries, such as fixed deposits, insurance commissions, dividends from equity shares, or tax collected while making purchases, like buying a car or foreign currency.

Employers typically deduct TDS from salary as per the declaration given by the employee, taking into account investments and expenses eligible for tax deductions. However, employers did not adjust the taxes paid by the employee against other sources. Now, this will change with the newly notified form from the CBDT.

By informing their employer about TCS collected and TDS deducted via this new form, the employee can lower their tax deduction from their salary. The move will help the employees deal with cash flow issues and increase their income to spend or save. CBDT notified the new form via a notification issued on October 15, 2024.