The PIL was filed by lawyer Ashwini Kumar Upadhyay. After the Supreme Court’s rebuke, he has confirmed that he will approach the Delhi High Court seeking repeal of TDS.
The TDS system requires tax to be deducted at the point of income generation – such as salary, interest, dividends and rental income. For example, when salary is paid, the employer deducts a part of the income as tax before giving it to the employee.
The PIL argued that the TDS mechanism is arbitrary, irrational and violates fundamental rights.
The PIL claimed that the government was wrongly shifting the responsibility of tax collection to private citizens. According to the petition, the government has the resources to handle tax collection through its department and it should not put the burden of this task on individuals.
Another concern raised in the PIL was the severe penalty for errors in TDS deduction. If a mistake is made, individuals may face heavy fines or even imprisonment. The PIL raised questions as to why tax officials do not face such punishment for mistakes committed on their part.
The PIL also highlighted how the TDS system adversely affected the economically weaker sections of the society. The PIL had argued that the complexities involved in understanding and complying with the TDS system often lead to additional administrative expenses and compliance costs.
(edited by : Anshul,
first published: January 24, 2025 at 3:20 pm First
