By P. N. Shah, Chartered Accountant
1. BACKGROUNDThe scope for Tax Deduction
at Source (TDS) and Tax Collection at Source (TCS) has been enlarged in
the last three Budgets presented by our Finance Minister, Smt. Nirmala
Sitharaman, in 2020, 2021 and 2022. Various Sections of the Income-tax
Act (Act) dealing with TDS and TCS have been amended, and some new
sections are added for this purpose. All these amendments have increased
the compliance burden on taxpayers. In this article, the various
amendments made in the Act in the last three years are discussed.
2. SECTION 192: TDS FROM SALARIESFinance Act, 2020, amended this Section, effective from
A.Y.2021-22 (F.Y.2020-21).
Section 17(2)(vi) of the Act provides for taxation of the value of any
specified securities or sweat equity shares (ESOP) allotted to any
employee by the employer as a perquisite. The employer must deduct tax
at source on such perquisite at the time of exercise of option u/s 192.
To
ease the burden of Start-Ups, the amendments in this Section provide
that a company which is an eligible start-up u/s 80IAC will have to
deduct tax at source on such income within 14 days (i) after the expiry
of 48 months from the end of the relevant assessment year, or (ii) from
the date of sale of such ESOP shares by the employee or (iii) from the
date on which the employee who received the ESOP benefit ceases to be an
employee of the company, whichever is earlier. For this purpose, th