At present, income-tax is being deducted at source at the rate of 10.2 per cent from the commissions paid to the STD/PCO owners. According to revenue department officials, given the substantial reduction in the rate of telephone calls, income of STD/PCO owners had suffered a setback.
They added that most of the STD/PCO owners were getting commissions between Rs 2,000 to Rs 3,000 per month out of which they were required to pay rent for their establishment, and maintain computers and other accessories. The TDS rate of 10.2 per cent, therefore, was on a higher side, they said, adding that the rate should accordingly be rationalised taking into consideration the ground realities.
Another suggestion by the income tax officials is to insert a new proviso in the Income Tax Act to allow credit for TDS in the year in which TDS certificate is produced provided that the relevant income is duly offered and assessed in the relevant assessment year. The TDS certificate in that case will have to be produced before the expiry of two years from the end of the assessment year in which the income is assessed. As per the existing provisions, there are two conditions to allow credit for TDS.
The TDS amount is to be paid to the government account and the credit is to be given in the assessment year for which the income is assessable.