The committee appointed to examine simplification of
Income tax department is emphasising on creating greater awareness on tax deducted at source (TDS) compliance.
“The department will create awareness for proper TDS compliance by all deductors,” Principal Commissioner of Income Tax D N Mishra said at a seminar on income tax TDS yesterday.www.taxxcel.com
Rakesh Goyal, CIT (TDS) explained the TDS provisions and assured necessary help to tax deductors as well as taxpayers in proper adherence to law.
The event was organised issued by Calcutta Citizens Initiative, All India Federation of Tax Practitioners and Rajasthan Bengal Maitri Parishad.
Speaking on the occasion tax advocate Narayan Jain said monetary limits of TDS should be revised upwards but rate should be scaled down in view of present exemption limit and lower rates of income tax.
He also said that multiplicity of provisions relating to Interest and Commission income need to be consolidated into for simplification.
TDS or Tax Deducted at Source, is a means of indirect tax collection by Indian authorities according to the Income Tax Act, 1961. TDS is managed by the Central Board of Direct taxes (CBDT), which comes under the Indian Revenue Services (IRS).
TDS is collected as a means to keep a stable revenue source for the government throughout the year, while desisting people from avoiding taxes.
How is TDS Deducted?
Income and expenditure such as salary, lotteries, interests from banks, payment of commissions, rent payment, payments to freelancers, etc. fall under the ambit of TDS. When making payments under these segments, a percentage of the overall payment is withheld by the source that is making the payments. This source, which can be a person or an organization, is known as the Deductor. The person whose payment is getting deducted is called the Deductee. For instance, a deductor is the employer paying salary to an employee (the deductee).
Advantages of TDS:
TDS is based on the principle of
The high-level committee under a former Delhi High Court judge to suggest simplification of Income Tax laws has submitted its report on TDS (tax deduction at source) reforms as one of the core recommendations for Union Budget 2016.
The report, accessed by Times of India, says, “TDS rates for interest income and commission need to be rationalized, the committee suggested that these should be halved to 5 percent”.
-The committee has proposed to raise TDS limit on bank deposit interest from Rs 10,000 to Rs 15,000.
– It has proposed to raise TDS limit on interest on securities from Rs 2,500 to Rs 15,000.
-It has proposed to raise TDS limit on payment in respect of NSS from Rs 2,500 to Rs 15,000.
-The proposal will especially benefit senior citizens whose main area of invest include Bank FDs and other small saving securities and schemes.
-It will also benefit consultants, brokers, house owners, small depositors, freelancers who pay TDS on their income.