01 August 2013
First let me thank the web site and the experts for answering my queries promptly.
I thank the government for the 6th Pay commission for giving me enough emoluments and retirement benefits due to which I am a tax payer even after retirement.
Thanks are due to the income tax department for introducing, quite simple e-filing of income tax return and I hope the nominal hidden taxation on the TDS amount (about 1 to 3% on the overall income) may also get resolved before the upcoming general election in favor of the tax payers. For all the past years I was taking the help of someone well versed with accounts to fill my tax return form. This year I filled them myself thanks to e-filing and ended up having lot of queries.
Now I have the following queries. Even for short term deposits (more than 15 days) nowadays interest are paid. Interest rates have been increased for savings bank accounts. PF one gets interest for mandatory as well voluntary contributions. IF a government employee takes temporary advance for purchasing some material and does not complete the purchase due to some unavoidable reason he is supposed to return and take fresh advance otherwise he will get a memo for misusing government money and the amount may be deducted from his salary with interest.
Is it justifiable for income tax department to make TDS compulsory, levy hidden tax on TDS amount and denying interest for TDS amount for all employees?
Can a government, public or private servant Opt out of TDS by filling some form and Open an annual Recurring Deposit (Let me say TDS_RD) for say about 10 or 20% of his gross salary which may fetch him some interest as well as enable him to pay his income tax due by the end of the financial year.
Will government allow financial institutions (Nationalised Banks,Cooperative Banks etc.) to open TDS_RD for its employees and close it after paying the tax due by end of the financial year.
02 August 2013
Yes there is also one scheme as per the provisions of Section 197 where the ITO TDS issues a certificate for lower deduction of tax but for that you have to file various forma and to take the certificate which if deposited with the TDS deductor the TDS deductor shall deduct at a lower rate of TDS this is for those assessees whose TDS is more than the requirement. This happens after considering the basic deduction into consideration which reduces the tax liability
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