A majority of income tax filers wished to ease the ITRs for individuals in a simpler way to calculate the incentives and deductions and ease the TDS framework for one rate one section, as per the survey of Deloitte. Indeed Deloitte the policy survey of the income tax recommended to prevent the need to issue Form 16A as the TDS data is reported before and available in the Form 26AS and Annual Information Statement (AIS) of the recipient.
As per the survey restricting the number of sections concerning the withholding tax, categorizing the payments into two to three distinct and non-overlapping categories, and ensuring that each section comprises only one rate shall lessen the load of compliance without any loss in tax collections from the viewpoint of tax administration.
For instance, 1% TDS on tangible goods, 2 per cent on services, 0.1 per cent on e-commerce transactions, and 10 per cent on other transactions such as dividends and interest.
Read Also: TDS at 1% Rate on Payments Applied to E-commerce Members
The survey of income tax policy comprises an online survey of more than 320 industry professionals in organizations in multiple industries, comprising C-suite, directors, and presidents from the finance and tax functions; general managers (finance/tax), and vice-presidents (finance/tax); and finance and taxation managers.
A majority of respondents i.e. 76% embedded for easing the calculation of incentives and deductions, showing assessee concern towards comprehending and calculating eligible incentives/deductions.
Approximately three-fourths 73% of respondents advocated easing the calculation of methodology of a fair value of assets and other property along with calculating the foreign tax credit.
It is a major task to simplify preparing and filing the individual ITR forms kept by nearly 74% of respondents, and 71% asked to ease the ITR forms for corporates.
For 73% of respondents ease of tax audit report is a critical task, showing a high level of intricacy and compliance load.
Nearly 68% of respondents outline the need to simplify the making and filing of TDS/TCS returns.
Also, Deloitte recommended that as an easier income tax law is in the works the government is required to prevent the usage of the provisions, and rather than that the text can be integrated into easier sentences for the reader to comprehend its logical operation effectively.
The tax law effectiveness could be improved if the words used were meaningful, well thought out, and well organized.
For instance, distinct pertinent sections might be in distinct parts of the law and can be merged into one chapter, as per Deloitte.
