« Top Headlines » Open DEMAT Account in 24 hrs  Income Tax Calculator FY 2023-24: How To Know Your Tax Liability Online On IT Dept's Portal?  BackBack Income Tax Act amendment on cards on tax treatment of MSME dues  ITR-1, ITR-2, ITR-4 forms for FY 2023-24 available for e-filing. Check details here  Income tax slabs FY 2024-25: Experts share these 8 benefits for taxpayers in new income tax regime  How To File ITR Online - Step by Step Guide to Efile Income Tax Return, FY 2023-24 (AY 2024-25)  Old or new tax regime for TDS on salary? This post-election 2024 event will impact your tax planning  What Are 5 Heads Of Income Tax?  Income Tax Dept releases interim action plan for FY25 on tax collection, refund approvals   Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Why you need not rush to file your ITR immediately «  Govt likely to extend tax incentives to STPI till '09... Bharti Airtel served notice to pay Rs 24.2-cr VAT... » I-T to tighten TDS norms for non-salaried October, 11th 2006 The income tax department is set to tighten norms for deducting tax at source. The department, which had found laxity in filing of TDS returns, is moving to tighten the loopholes. The move could end the party for non-salaried tax payers like contractors, traders, small businessmen whose tax gets deducted at source when they receive payments from various sources and have refunds to claim. These tax payers, for whom working capital is a problem, will have their money locked up as they would have to wait for the refunds. Sources said the idea behind the move is to establish a trail and keep a tab on the flow of money. Unlike the quarterly instalments in which advance tax is paid by this category of assesses, TDS is a monthly pay out. The latter ensures a regular cash flow for the government, as against advance tax which comes only once in three months. They said compared with advance tax, TDS has the advantage of producing a paper trail. In any case, about 50% of the total direct tax collections come through the TDS route. With this in mind, the department is soon expected to send an instruction to its field formations to stick to the formula given in the rule 28A(A) of the Income Tax Act, 1961. For example, a government contractor does some work for which he receives a payment. This payment would be made after deducting tax. But, if the contractor gets a certificate from his assessing officer that he does not have a tax liability, then his TDS would not be deducted. The real problem is that assessing officers were found to be issuing certificates with zero or lower TDS rates. With such a certificate in hand, tax payers could escape from TDS net or get away with lower deduction. With the norms being tightened, non-salaried tax payers will have to shell out TDS as per the formula and this could result in their money remaining with the department longer as refund takes about 16 months. The issue had been highlighted at the conference of chief commissioners and director generals of income tax. The Central Board of Direct Taxes had also discussed it at its recent meeting after which it was decided to issue an instruction for assessing officers.