TDS likely to be restructured soon

Last updated: 24 April 2007

The system of tax deduction at source (TDS) could be expanded further to include more business under its domain. This means more types of business will have to deduct the tax, before making payments to parties.

The revenue department is also considering a proposal to restructure the administration of the TDA set up.

At present, TDS includes income from salary, interest on securities, dividend from domestic companies, prize money from lotteries, etc.

Budget 2007-08 has already proposed bringing a few more income heads like payment to contractors by individuals for business purposes under TDS. According to sources, the revenue department is also planning to strengthen the computerisation network of TDS, which would help increase its database.

The department is also planning to set up commissionerates for TDS. In order to check tax evasion, it will set up a proper TDS structure by strengthening existing TDS commissionerates and opening new ones in the four metros and tier II cities. All the commissionerates will also be required to file TDS data electronically, so that the information is verified with the tax returns filed by taxpayers.

Tedious Changes
• TDS may be expanded to include income from more trades
• Computerisation network may be strengthened to increase database
• Commissionerates may be set up to check tax evasion

The proposals form a part of a report on TDS restructuring. The department is of the view that the move will help to strengthen the TDS system and increase compliance levels amongst taxpayers. “We are looking at ways to expand our tax base and generate more revenue. This report is one of the proposals we are discussing,” a finance ministry official said.

With the direct tax collection target fixed at Rs 2,67,175 crore for 2007-08, a 16% increase over last fiscal, the Central Board of Direct Taxes is already looking at measures to increase collection. It is planning to focus on the use of investigative measures like raids and surveys to raise both collection and compliance.

Banks want RBI to pick their auditors January, 05th 2007 In a strange turn of events, nationalised banks have spurned a Finance Ministry offer to let them choose their own auditors. They would rather have the RBI pick their auditors.Most nationalised banks are believed to have conveyed to the Reserve Bank that they would rather let it appoint auditors for them instead of appointing their own auditors. Last year, the Finance Ministry granted PSU banks the power to decide their own auditors. This drew protests from CAs, who felt banks would appoint auditors who would favour them. That seems to have pushed the banks to ask the RBI to do the choosing. Sunil Goyal, Chairman, Western Region , ICAI says, "There are many CA firms in the eligible category, for banks to choose 40 or 50 among them would have been difficult." Until now, the RBI appointed thousands of branch auditors for PSU banks. The ICAI shortlists about 20,000 CA firms from all over India and forwards the list to the RBI. The RBI then allots each PSU bank a few thousand auditors to audit their various branches. This ensures wide distribution of work for CA firms, which could have been disturbed, had banks agreed to appoint their own auditors. But now, CA firms can breathe easy.Money Bombay Stock Exchange National Stock Exchange Bank finanace Income Tax Stock Commodities Banking Bank finanace Income Tax Stock Commodities Banking

Category Income Tax Report

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TDS likely to be restructured soon

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