Finance Act 2024: Parents Can Now Claim TCS Credit for Minors
Introduction of New Amendment in Section 206C of Income Tax Act
The Finance Bill 2024 brings forth a crucial change in Section 206C of the Income Tax Act concerning Tax Collected at Source (TCS) for transactions involving minors. Previously, there was no provision for individuals, other than the tax collector, to claim credit for TCS. This created challenges for funds transferred in a minor’s name under schemes like the Liberalized Remittance Scheme. To address this issue, the Bill proposes allowing parents to claim TCS credit for their minor children, provided the minor’s income is included in the parent’s total income under Section 64(1A).
Expansion of TCS Scope and Other Updates
Additionally, the Bill expands the scope of TCS on high-value goods and updates provisions related to correction statements and interest rates on unpaid TCS. These changes will come into effect from January 1, 2025, with specific amendments being enforced on April 1, 2025, and October 1, 2024.
Amendment Details and Key Points to Note
Under Section 206C, taxpayers can now claim TCS credit for minors in their tax returns.
Effective January 1, 2025, the amendment allows sellers to collect TCS on sales exceeding ten lakh rupees.
Correction statements for TCS must be submitted within six years from the end of the financial year.
Interest rates on unpaid TCS have been increased to one and a half percent for defaulters.
New provisions have been introduced to prevent collection of tax at lower rates without valid justification.
Takeaway
The Finance Act 2024 aims to streamline the TCS process and ensure fair treatment for taxpayers. Parents can now claim TCS credit for their minor children, providing relief for those facing challenges with funds remitted in a minor’s name. The amendments will be enforced gradually, with specific dates for different provisions to take effect. Stay informed and updated on these changes to comply with the revised regulations.and add some rlated instagram viral hashtags in the end