Tax Deducted at Source [TDS] is the advance payment in Income Tax and this belongs to the IT department.
Taxes are the sources for Government revenue. Unless, common people pay tax, government cannot afford to move a step forward. Even if taxpayers refuse to pay, the IT department will collect the money by hook or crook. However, with TDS system, taxpayers are facing several problems which were introduced by the previous government. With change of guard in the center, taxpayers are expecting the government to abolish this TDS system.
Here are few problems of TDS system.
Salaried people simply have to file their returns and claim credit for the TDS from the salary and the interest. Obviously they feel that they have paid all their taxes and any further payment to the tax department can be ignored. While Professionals get professional fees and pay taxes after TDS. They pay advance tax each quarter and file income tax returns in time. The third category are small time business running taxpayers, they are supposed to deduct tax at the correct rates from the different types of payments made and pay to the government. At the end of the year, they will be left with calculated taxable income and paid tax.
But tax experts say that the entire TDS system itself is wrong as nine of ten clients won't get the credit for the entire sum of TDS that is claimed in that client's return of income. Taxpayers need to run across departments to claim their credit. Even the tax department too stays unmoved when a taxpayer approaches to claim the credit. So to avoid them, the tax department throws the taxpayer between Central Processing Centre [CPC], a facility to process electronically filed returns, and his/her own jurisdictional tax officer in the 'circle' where he/she is assessed. Nonetheless the taxpayer end up with nothing and therefore the demand for the tax you have already paid against you stands.
If a refund is due, it is adjusted even when there is nothing due. Meanwhile non-payment of earlier demands will be charged additionally with penalties and periodic notices of the outstanding due keep pouring down. There are lakhs of taxpayers who are facing the same problem and they along with the tax experts are expecting the new government to abolish this system. But will the NDA government look after or continue the same as the UPA government did ? Arun Jaitley and Modi please look for a solutuion.