IS IT FAIR TO MAKE OBTAINING VALID TDS CREDITS TEDIOUS?
Sai Bhosale Chartered Accountant
Getting credit for TDS has become a prickly
point in many of the intimations issued u/s 143(1) of the Income tax Act, 1961
and even in the case of assessments. The Government has tried to automate the
process, which was expected to simplify the grant of credit for TDS and issue
of refunds. However, the computerised system is unable to solve certain issues
to the required extent, which gives a substantial headache to the assessee. She
needs to tackle the demands that are created due to non-grant of correct credit
of the TDS entitlement or issue of incorrect refunds. The process becomes more
complicated, especially because the assessee has to deal with a Centralised
Processing Centre (CPC) which does not entertain any human interaction!
Some of the major issues faced by an
assessee in respect of TDS credit are as follows:
Non-payment of TDS by the deductor to the
Government or non-filing or incorrect filing of relevant TDS return by him is a
A different system of accounting followed by
the deductee and the deductor, resulting in a different year of deduction by
the deductor and the claim of TDS by the deductee, is another one.
Statutory postponement of claim of TDS as
per Rule 37BA of Income-tax Rules, due to which TDS is not allowed to be claimed
unless the relevant income is offered to tax by an assessee. In many cases this
results in non-grant of TDS credit to the assessee in the year of such claim.
Deduction and payment of TDS being made in a
subsequent year by the deductor as compared to the year of accrual of the
relevant income as per the accounting system followed by the deductee, more
often than not results in deprival of TDS credit to the deductee in the
WHY IS IT UNFAIR?
After TDS has been deducted, the deductee
remains at the mercy of the deductor for securing the credit for th