Budget 2018: Tax payment is a crucial issue and the Narendra Modi government is expected to make certain changes in the upcoming Budget 2018.
Budget 2018: Tax payment is a crucial issue and the Narendra Modi government is expected to make certain changes in the upcoming Budget 2018. Finance Minister Arun Jaitley should address the issue of auto-filling of Tax Deducted at Source (TDS) data in Income Tax Returns(ITR) in the Budget 2018, the Institute of Chartered Accountants of India (ICAI) has said. The apex Chartered Accountants’ body said, “Currently an assessee filing his income tax return needs to fill all the data manually wrt the taxes paid by him/on his behalf (TDS) in excel utility.” “Since TDS returns are e-filed now days, an asseesee by manually punching the data relating to prepaid taxes like TDS is prone to committing errors,” ICAI said. The body has noted that there is an unnecessary effort in punching the data manually which can be automated as the data can be picked from TDS returns filed by deductors based on unique field ie PAN of the deductee assessee. “This will lead to efficient use of technology and lesser errors in ITRs relating to data of prepaid taxes like TDS,” it said.
ICAI has come up with suggestions to change the current scenario in the Budget 2018. “Necessary changes may be made to the e-filed ITR forms using excel utility so that data relating to TDS deposited on behalf of assessee deductee is automatically picked from TDS statements filed by deductors based on unique field like PAN,” the body has said in its pre-budget memorandum.
Watch this video
Income Tax slabs are generally fixed in the Budget. As per the Income Tax Act, persons or entities responsible for making payments are required to deduct tax at source at prescribed rates. This system is known as ‘Tax Deducted at Source’ or TDS. Under this system, tax is deducted by the payer while making payments and is remitted to the government on behalf of the payee. The provisions of deduction of tax at source are applicable to several payments such as salary, interest, commission, brokerage, professional fees, royalty, contract payments, etc.
Salaried employees generally look forward to know the Income Tax slabs in the Budget. As per rules, TDS is deducted from your salary each month and once you receive your Form 16, you file your taxes basis the TDS details. This system has been introduced by the Income Tax Department (ITD) which mandates people to deduct TDS when you make some specific payments such as commission, salary, rent, professional fees, etc. The concept of TDS deduction is simple and based on a principle where the person making payment is required to deduct a certain percentage as TDS.
Watch this video
Notably, TDS is applicable on payment of salaries, interest, commission, rent, professional fees etc. In case of salaried individual, the employer deducts TDS based on income tax slab rates. In case of payments other than salary, the person making payment deducts TDS at the specified rates. For example, the rate of TDS applicable on payment made for professional services is generally 10%. The TDS so deducted is paid to the government account and this is the responsibility of the person deducting TDS. The TDS payment is to be made by the 7th of the following month. TDS returns also need to be filed on a quarterly basis at the specified date which is the last day of the month following the end of the quarter. If the Modi government introduces the auto filling of TDS data in ITR in the upcoming Budget 2018, it will come as welcome relief.