TDS/TCS Amendments in Finance Bill, 2023 - A Snapshot!
Tax Deduction at Source (TDS) provisions were introduced back in 1961. Theywere implemented on the principle of “pay as you earn” and to have a regular source of revenue for the Government throughout the year. TDS is an important mechanism for collection of tax.
Over the years, the scope of TDS and Tax Collection at Source (TCS) is widened by adding new sections in the Income-tax Act, 1961 (ITA) with an objective to minimise tax evasion and increase tax compliance. In the recent years, TDS was introduced for E-commerce operators, Virtual Digital Assets, Purchase of goods, higher withholding tax for non-filers of tax returns, TCS on goods and services etc. Government gives utmost importance to compliance of TDS provisions by limiting allowability of corporate expenses only on payment of TDS, levy of interest, penalty and in some cases prosecution for non-compliance of TDS/TCS provision. With the changes in TDS/TCS provisions every year, it becomes imperative for the business community to be updated with all the changes for ensuring smooth compliances.