TDS-TRACES Issues Arising Post Aadhaar-PAN Linking
Using TaxGuru platform, I am raising above issue which is already raised to Finance Minister and CBDT. Extract of my letter is as under :
I would draw your kind attention to a critical issue faced by taxpayers nationwide regarding the processing of Tax Deducted at Source (TDS) returns on the TDS-TRACES portal.
After the mandatory Aadhaar-PAN linking, taxpayers have adhered to the requirement of paying a penalty of ₹1,000 as prescribed under the Income Tax Act. However, despite fulfilling this obligation and successfully linking Aadhaar with PAN, discrepancies continue to arise in the TDS returns processed through the TDS-TRACES portal.
Key Issues
1. Unnecessary TDS Demands: Automated processes on the Income Tax portal are generating undue TDS demands, particularly insisting that tax deductors pay the shortfall between 20% (default TDS rate) and the applicable tax rate already deducted and deposited. This issue persists even after regularization, causing unnecessary financial strain and procedural difficulties for both taxpayers and tax deductors.
2. Litigation and Mental Agony: These baseless demands lead to avoidable litigation, resulting in undue mental and financial stress for honest taxpayers.
3. Lack of Grievance Redressal: Despite filing complaints through the appropriate grievance redressal mechanisms, the issues remain unresolved, fostering negativity and eroding trust in tax authorities and the government.
Our Prayer
We humbly request the Hon’ble Finance Minister and the Central Board of Direct Taxes (CBDT) to:
- Issue Immediate Guidelines: Provide clear instructions to address and rectify discrepancies arising from automated TDS processing.
- Ensure Human Oversight: Review the system to ensure that automated processes do not create unnecessary demands without human verification.
- Streamline Grievance Mechanisms: Strengthen and expedite the grievance redressal process to resolve taxpayers’ issues promptly and efficiently.
A prompt resolution will alleviate the burden on taxpayers and tax deductors, reduce litigation, and restore confidence in the tax system. It is vital to uphold the principle of ease of compliance for honest taxpayers and foster a fair taxation environment.
We trust your leadership in addressing this pressing issue and look forward to your positive intervention.
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Thank you for your time and attention.
CA Satish Kadam, Thane
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