Taxpayers are to get relief on their tax deducted at source (TDS) obligations with regard to their payments for expenses in March the last month of the financial year for income-tax purposes.
They will now get six months time to deposit the TDS related to payments made in March and also escape disallowance of expense under the Income-Tax law.
This relief forms part of the amendments moved to the Finance Bill 2008, which has been passed by Parliament recently.
Hitherto, if a person liable to deduct tax at source on specified expenditure fails to do so or fails to pay the tax within the time allowed to him, the expenditure is disallowed, besides subjecting delayed payments to interest and penalties. The latest amendment is a welcome move for assessees. Those who are determining payments in the month of March can get time till the due date of filing returns for paying TDS to the Government.
The important thing is disallowance of expenses will not be there in such cases, Mr G. Ramaswamy, Central Council Member, ICAI, told Business Line.
Mr Aseem Chawla, Partner, Amarchand & Mangaldas, said that the amendment was a welcome decision as it would provide relief to tax payers.
Hitherto, the consequences of non-deduction of tax at source or failure to pay TDS to the Government were onerous, he pointed out.
The amendments to the TDS provisions have been made on a retrospective basis from assessment year 2005-06.