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Saturday, 11 March 2017

With GST on anvil, do we really need TDS in income tax now?

With GST on anvil, do we really need TDS in income tax now?

With advent of GST, government will be able to track much more transactions due to invoice wise return, difficulty to bypass the credit chain and linking of income tax with indirect tax through PAN.

The government can easily match the return of income tax and GST to find any under disclosure of income. So, instead of TDS deduction, which is a huge compliance burden for everybody, scope of quarterly advance tax can be increased. This will benefit government also as it will get revenue in beginning of each quarter instead of monthly thus giving time value of money.

I am not saying to altogether abolish TDS but its scope can be restricted to some specific transactions like u/s 195, salary (will reduce burden of advance tax compliance on common man), gambling or transactions for which no invoice is issued under GST.

Though I find hard to fathom any headway in this direction in near future with scope of TDS only increasing, still I would like to throw open this discussion for everybody.

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