Industry bodies ask finance ministry to ease TDS rates for Union Budget 2025: Report

Industry bodies have asked the finance ministry to simplify the rates of tax deducted at source (TDS) as the Union Budget will be presented in February next year(Representational Image/Pixabay)


Industry bodies have asked the finance ministry to simplify the rates of tax deducted at source (TDS) for the Union Budget, which will be presented in February next year, Business Standard reported. This was to reduce compliance burden on taxpayers and also avoid litigation.

Industry bodies have asked the finance ministry to simplify the rates of tax deducted at source (TDS) as the Union Budget will be presented in February next year(Representational Image/Pixabay)

Also Read: Jet Airways’ 1.43 lakh retail shareholders stare at wipeout after Supreme Court liquidation order

Why do TDS rates need simplifying?

Under the Income Tax Act, there are currently 37 types of payments to residents, and the TDS rates vary from 0.1% to 30%.

This often ends up in disputes related to categorisation and interpretation, according to the report, which added that cash flows to the industry also end up getting blocked, and the government may be forced to pay interest on refunds.

What are the suggestions of industry bodies?

“The government has made a good start to the simplification process by reducing the TDS rates on several payments from 5 per cent to 2 per cent through Finance (No.2) Act 2024,” the report cited FICCI’s submission as saying. “Going forward, it is suggested that there be only three rate structures for TDS payments – TDS on salary at the slab rate, TDS on lotteries/online games etc at maximum marginal rate and two standard rates for TDS for different categories.”

Also Read: Air India cancels several flights in peak winter. What passengers should know

The CII also made a similar proposal, asking for two to three categories of payment and a small negative list not liable to paying TDS, according to the report.

The CII also said that TDS for salaried class can be as per normal rates, bit could be 30% for lotteries and horse race winnings. It also added that existing TDS sections with a rate lower than 5% can should continue with existing rates while all other payments can be taxed between 2-4%, while payments to senior citizens and charities can be on the exemption list.

FICCI also advocated for an independent dispute-resolution forum comprising of experts, according to the report. “Time-bound resolution by an independent forum will build confidence among taxpayers who may come forth to settle matters instead of pursuing litigation in fear of penalty and prosecution,” the report cited its steement. “It will reduce prolonged litigation and also demands/refunds locked up due to such litigation.”

The PHD Chamber of Commerce and Industry (PHDCCI) meanwhile, advocated for abolishing security transaction tax.

Also Read: FSSAI asks state authorities to increase surveillance in warehouses of e-commerce operators



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *