Assocham in its recent suggestion the government of India has made a clear indication towards the reduction in the TDS for the next budget and has cited the reason that the litigations of accurate rate on the application. Currently, there are multiple rates on the charts of the Income-tax act on multiple categories of the transactions and has created a lot of confusion in the consideration of some sections which creates disputes.
The chamber stated that” slashing of TDS to one or two rates and could be as low as 0.1% or 1%”. And the Assocham also supported that only one or two rates should be applied in order to make a streamlined process.
The chamber in its statement also said that” This would achieve the twin objective of creating a log of the transaction in the tax department’s database (in cases where the trial cannot be established by other sources) while reducing litigation on the application of the correct rate.”
All the 40 sections in the income tax act about TDS have multiple sections and rules/forms associated with the act as well as TDS provisions making it is a complex task.
The chamber stated, “It is evident from the statistics, that only a few sections contribute significantly to the total collections by way of TDS. The other sections contribute a minuscule portion to the total amount of TDS collection.”
“Such low figures emphasize the need for reconsideration of these provisions, considering that though their removal would have a little impact on the tax collections, it can provide relief for the taxpayers from the necessary compliance burden which revolves around such provisions.”
