Income Tax Return, ITR News: Deloitte’s Income Tax Policy Survey also suggested eliminating the need for issuing Form 16A as the TDS information is already available in the recipient’s Form 26AS and AIS.
Income Tax Return, ITR News: Most income tax filers have advocated simplification of ITR process, ease of calculation of incentives and deductions and simplification of TDS structure to ‘one rate one segment’. Deloitte’s Income Tax Policy Survey also suggested doing away with the need to issue Form 16A, as TDS information is already available in the recipient’s Form 26AS and AIS.
The survey has suggested limiting the number of sections relating to tax deduction, classifying payments into two-three distinct and non-overlapping categories and ensuring that each section has only one rate, which will significantly reduce the compliance burden without any major loss in tax collection from the tax administration point of view.
For example, one per cent TDS (Tax Deducted at Source) on tangible goods, two per cent on services, 0.1 per cent on e-commerce transactions and 10 per cent on other transactions like dividend and interest. Over 320 industry professionals from organizations across various industries participated online in the Income Tax Policy Survey.
76 per cent of the respondents advocated simplifying the calculation of incentives and deductions, which reflects the concern of taxpayers in understanding and calculating eligible incentives/deductions. Of these, nearly three-fourths i.e. 73 per cent advocated simplifying the method of calculating the fair value of assets and other assets as well as the calculation of foreign tax credit.
Ease of filling and filing of individual ITR forms is a key demand, supported by nearly 74 per cent of respondents, while 71 per cent sought simplification of ITR (Income Tax Return) forms for corporates. Simplification of tax audit reports was supported by 73 per cent of the survey respondents, while nearly 68 per cent of respondents stressed the need to simplify the preparation and filing of TDS/TCS returns.
Deloitte recommended that as a simplified income tax law is in the works, the government should avoid using provisions and instead express the text in simple sentences to make it better understood by people. The effectiveness of tax laws can be enhanced by using meaningful, well-thought-out and well-organised wording.