Chapter XVII-B of the Income-Tax Act,1961 deals with deduction of tax at source(TDS) from specified payments and depositing the TDS with the Government.
TDS is very tedious indeed. It involves expenditure and effort in complying wit provisions-keeping records, deducting the amounts, depositing them within specified time limits and furnishing TDS returns.
Organisations have to devote full-time staff to comply with it. These organisations (deductors of TDS) get no remuneration from the Government for their efforts. On the contrary, they are penalised for slip-ups by way of
TDS is very tedious indeed. It involves expenditure and effort in complying wit provisions-keeping records, deducting the amounts, depositing them within specified time limits and furnishing TDS returns.
Organisations have to devote full-time staff to comply with it. These organisations (deductors of TDS) get no remuneration from the Government for their efforts. On the contrary, they are penalised for slip-ups by way of
- penalties,
- interest and
- disallowance of amounts paid without TDS deduction in computation of business income.
Really innovative idea .. But on a macro front how this 5 % would be and is govt willing to forego that much amount ?
ReplyDeleteAlso the govt is worried about falling tax revenues, what can prompt govt to do so ?
ReplyDeleteGovt can have useless bodies like Planning Commission, NAC etc. It can squander money on scams. Cant pay 5% of TDS collected to deductors?
DeleteBetter still. It should be scrapped. It should be the responsibility of the tax payer to pay tax. So much of time and energy will be saved. Make the penalties heavy so that there will be less spillage.
ReplyDelete