The tax payers, pursuant to amendments proposed by Finance Minister P Chidambaram in the Finance Bill 2008, would get additional six months for depositing TDS for March, the last month of a financial year.
The amendments has to be given retrospective effect from assessment year 2005-06. This will also take care of most hardship cases where some genuine mistake was committed. "We must move towards a situation when nearly 100 per cent of taxes are collected voluntarily through TDS and through advance taxes," Chidambaram explained in the Lok Sabha on Tuesday, adding, there would be no disallowance of expenditure incurred in March, if the tax deducted at source has been paid before the due date of filing of the return.
As per the TDS provisions, expenditure is not allowed and penalty is imposed if a taxpayer fails to deduct TDS at source and pay the tax within the stipulated time.
The government has relaxed the TDS provisions in view of the representations received from the members of Parliament and industry.
"With a view to mitigating the hardship, I propose to insert a new Clause 8 in the Finance Bill 2008," he added.