Filing income-tax returns has never been so saral, as is made out to be. The latest controversy is about filing TDS (tax deducted at source) certificates. Last year, the department had issued an advise to taxpayers not to file any attachment with the returns. However, when taxpayers complied, the department changed its stand.

It said the TDS certificates would have to be filed along with the returns, else the returns will not be accepted.

Now, taxpayers are in a fix: to file the attachment or not. Chartered accountant Nilesh Kapadia explains the dilemma. He says the income-tax commissioners are refusing to accept the returns if TDS certificates are not filed with the returns.

Even when you produce copies of TDS certificates along with the returns, the commissioners continue to reject the returns. The department insists that TDS certificates should be original.

The I-T department says the advise by the tax authorities not to file any attachment with the returns was part of its ongoing exercise to automate the whole administration. Office of the chief commissioner, Mumbai, said the instruction for not filing any attachment with the return was made in the financial year 2006-07.

The CBDT has already issued instructions that if the TDS claim by the employer is less than Rs 5 lakh or if the refund is less than Rs 25,000, the taxpayer need not produce the TDS certificate. In all other cases, the returns should carry the TDS certificate.

The office also explained the reason for the changed stance. Quite often, employers who are supposed to file quarterly returns do not follow the rule. And when they file it, they do not fill in crucial details like the PAN of the employee from whose salary the TDS has been deducted.

This prevents the officers from verifying the TDS payment mentioned in the return. Therefore, despite a decision to ask the employees not to file any attachment with the returns, the department had to reconsider the decision.
According to tax lawyer Jignesh R Shah, Till the tax administration becomes completely automated, the taxpayers should be given an option to file returns electronically or manually.