The Income Tax Department will now mail to individual assessees the details of the tax deducted at source (TDS) on their Income from different sources like banks, employers or post offices.Officials said the move is aimed at preventing any discrepancy between the TDS actually deducted and the TDS received by the tax department.
A circular to this effect has been sent by the Central Board of Direct Taxes (CBDT) to all offices across India.According to official sources, complaints were received by the department that TDS was being collected arbitrarily by the payers.While submitting the returns, it is not possible to scrutinise the TDS rate and amount collected at the collection centre.Online GST Certification Course by TaxGuru & MSME- Click here to Join
Around 40-45 per cent of the total revenue of the government comes through TDS.
Another reason for this decision is that refunds from the department have also gone up. Sources said it should not affect the assessee who may be paying a high rate of TDS and is not compensated even after the employer or broking firm or any other organisation gets a refund on higher rate of TDS which may not be applicable to such income.
TDS is one of the ways of collecting tax from the taxpayers in India, directly at the source at which the income arises or generates. Some of the items which attract TDS are salary, interest, rental fee, interest on securities, insurance commission, dividends from shares and mutual funds, commission and brokerage, prize money won from lotteries, horse races, payments to non-resident sportsmen or sports associations, commission on sale of lottery tickets, fees for professional and technical services and the like, compensation for compulsory acquisition, income from units of an offshore fund and income from foreign currency bonds or shares of Indian companies (unless specified as tax-free).
There are numerous rates of TDS applicable to various classes of taxpayers, which has made TDS calculation cumbersome. In order to make TDS calculation easier, the CBDT in its Budget recommendations last year, had proposed a uniform rate of TDS for all tax payments.