PIL Seeks to Scrap TDS System
A Public Interest Litigation (PIL) was filed in the Supreme Court on Thursday challenging the tax deducted at source (TDS) system under the Income Tax Act. The plea called the system “arbitrary and irrational,” claiming it violates fundamental rights such as equality, freedom of profession, and personal liberty.
Key Arguments Against TDS
The PIL, filed by lawyer Ashwini Upadhyay through advocate Ashwani Dubey, argued that the TDS system imposes significant administrative and financial burdens on taxpayers. It highlighted issues such as complex compliance requirements, issuing TDS certificates, filing returns, and penalties for minor errors.
Small earners and individuals below the taxable income threshold face undue hardship, as tax is deducted at source regardless of their liability. The plea also referred to Article 23, asserting that imposing tax collection duties on private citizens amounts to forced labor.
Constitutional Violations Highlighted
The petition claimed the TDS system breaches Articles 14, 19, and 21 of the Constitution. It disproportionately affects economically weaker sections and shifts sovereign responsibilities to citizens without adequate safeguards or compensation.
Proposed Directions
The PIL seeks:
- NITI Aayog’s Review: Suggestions for necessary changes in the TDS framework.
- Law Commission’s Report: Examination of TDS legality and submission of a report within three months.
The plea urges the court to declare the TDS system void and push for reforms that reduce the administrative burden on taxpayers. The Supreme Court is expected to consider the petition soon.
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