The tax authority is set to launch an online service through NSDL to enable employees to ensure that TDS deducted from salary is duly filed by employers.

Taking cognisance of the concerns of employees and doubts regarding filing of tax-deducted at source (TDS) by employers, the tax department is set to come out with a service that will enable employees to keep tabs on the filing of their TDS returns by the employer. This service, to be offered through the channel of the National Securities Depository Ltd, will be launched by the middle of next week, revealed an official from the Central Board of Direct Taxes (CBDT) on the occasion of a seminar organised by the Indian Merchants’ Chamber on ‘TDS – Recent Developments in Law and Procedures’.

Describing it as an effort to make the deductor accountable and the deductee aware, Shri S S N Moorthy, chairman of CBDT said, “We have created this system to empower the tax payers and keep the deductors on their toes. This will enable the deductee to check whether the returns for the TDS deducted from his salary have been duly filed with the income tax department by his employer.”

Concerns have been raised of late regarding the compliance by companies towards filing and deposit of due taxes. Companies are required to deduct tax while making payments of salaries to employees. Although companies were deducting the same, it was suspected that some were withholding payments of the collected TDS returns to the income tax department.  This has forced the I-T department to consider measures to closely scrutinise returns filed by companies and check payment defaults in an effort to boost tax collections.

Entities required to deduct taxes while making payments will have to register themselves on the online service. Employees will then be able to access data with the NSDL regarding the filing of their TDS returns by the company.
In an effort to sensitise tax payers and other participants towards the complicated TDS procedures, the tax authority also plans to launch an online tutorial covering various aspects of TDS. This will also include answers to frequently asked questions (FAQs) regarding TDS provisions.

Mr Moorthy stated, “My primary concern is sensitisation of people who deal with TDS matters in various companies. Much of the confusion and complexities can be avoided if these people can be sensitised towards various provisions of TDS.”
Sriram Singh, Chief Commissioner of Income Tax –IV, also stressed on the need to educate various participants in the tax system. “Unfortunately, what is the law is not practised and what is practised is not the law. There is a need to bridge the gap between the two.”

P P Srivastava, Chief Commissioner of Income Tax, Mumbai, also agreed, highlighting the shortfall in TDS collections in Mumbai city last year. “Somehow, there is a mismatch at the implementation level. Some firms have not been paying in time. We need to act as facilitators to this process of TDS collections.”

Kishor Karia, chairman of the Direct Taxation Committee, Indian Merchants’ Chamber, stated that immediate clarifications on certain grey areas in TDS are needed and proposed that a forum be created for arriving at solutions for various procedural issues with regard to TDS. — Moneylife Digital Team