« Top Headlines » Open DEMAT Account in 24 hrs  Budget 2024 makes new income tax regime more attractive: See how much taxes you can now save  ITR filing 2024: New vs old income tax regimes, 6 key things to consider while filing your tax return  These five technical glitches may impact your Income tax return (ITR) filing. Know here  ITR filing 2023-24: How to optimise Section 80D deductions at the time of filing tax returns  ITR filing 2023-24: Top 7 mistakes to avoid for hassle-free income-tax return filing this year  Income tax returns for FY 2023-24: Keep these 8 tax law changes in mind while filing ITR this year  ITR Filing 2024: Know who can and cannot file income tax returns using ITR-1 this year  Income Tax Filing: 10 necessary guidelines that you must be aware of  Why you should file your income tax returns before July 31  What is Form 26AS? How to download Form 26AS to file Income Tax Return (ITR)  Income Tax Return: What are the alternatives to Form 16 that can be used while filing ITR? «  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.