Now, keep tabs on whether your employer is filing TDS returns

The tax authority is set to launch an online service through NSDL to enable employees to ensure that TDS deducted from salary is duly filed by employers.

Taking cognisance of the concerns of employees and doubts regarding filing of tax-deducted at source (TDS) by employers, the tax department is set to come out with a service that will enable employees to keep tabs on the filing of their TDS returns by the employer. This service, to be offered through the channel of the National Securities Depository Ltd, will be launched by the middle of this week, revealed an official from the Central Board of Direct Taxes (CBDT) on the occasion of a seminar organised by the Indian Merchants' Chamber on 'TDS - Recent Developments in Law and Procedures'.

Describing it as an effort to make the deductor accountable and the deductee aware, Shri S S N Moorthy, chairman of CBDT said, "We have created this system to empower the tax payers and keep the deductors on their toes. This will enable the deductee to check whether the returns for the TDS deducted from his salary have been duly filed with the income tax department by his employer."

Concerns have been raised of late regarding the compliance by companies towards filing and deposit of due taxes. Companies are required to deduct tax while making payments of salaries to employees. Although companies were deducting the same, it was suspected that some were withholding payments of the collected TDS returns to the income tax department.  This has forced the I-T department to consider measures to closely scrutinise returns filed by companies and check payment defaults in an effort to boost tax collections.

Entities required to deduct taxes while making payments will have to register themselves on the online service. Employees will then be able to access data with the NSDL regarding the filing of their TDS returns by the company.

In an effort to sensitise tax payers and other participants towards the complicated TDS procedures, the tax authority also plans to launch an online tutorial covering various aspects of TDS. This will also include answers to frequently asked questions (FAQs) regarding TDS provisions.

Mr Moorthy stated, "My primary concern is sensitisation of people who deal with TDS matters in various companies. Much of the confusion and complexities can be avoided if these people can be sensitised towards various provisions of TDS."

Sriram Singh, Chief Commissioner of Income Tax -IV, also stressed on the need to educate various participants in the tax system. "Unfortunately, what is the law is not practised and what is practised is not the law. There is a need to bridge the gap between the two."

P P Srivastava, Chief Commissioner of Income Tax, Mumbai, also agreed, highlighting the shortfall in TDS collections in Mumbai city last year. "Somehow, there is a mismatch at the implementation level. Some firms have not been paying in time. We need to act as facilitators to this process of TDS collections."

Kishor Karia, chairman of the Direct Taxation Committee, Indian Merchants' Chamber, stated that immediate clarifications on certain grey areas in TDS are needed and proposed that a forum be created for arriving at solutions for various procedural issues with regard to TDS.



Shantilal Hajeri

6 years ago

Recently I received a notice from the income tax department asking me to pay the difference of tax less paid y me along with interest.

In fact i was expecting a refund since the amount of TDS ws more than my tax liability.
Perhaps this has happened because, some of the tax deductors have not depsited the amount of tax deducted from with income tax department.
1) There are alreadystringent provisions in the income tax department. The department should implement them against the tax deductors who deduct the tax but do not deposit with tax department.

2) Once the assessee submits F 16, TDS amount shouwn in F 16 should be treated as tax paid by assessee even if the tax deductor has not deposited the same.

3) The onus of recovering the money from Tax deductor should be on Income tax Department. They have got enough statutory powers to do so.

4) Another common problem is the abnormal delay in issueing F16. For the year 2009-10, I have not yet received F 16 from many deductors.

5) Many people decut tax at source even for a paultry sum, there by increasing work load at every level. For example, the amount for Professional fees is 20,000 pa for deducting Tax at source. There are organisation who deduct TDS even for a sum of Rs.450/-pa.
I hope IT department will look into my suggestions.

Aditya Birla Retail to focus on reducing the number of private labels, increasing volumes from the existing ones

Private labels contribute 19%-20% Aditya Birla Retail’s total sales. It wants to reduce private labels to focus on volume sales

Aditya Birla Retail Ltd (ABRL) is betting differently on private labels, products that are sold by retailing companies under their own brand name. The company is now concentrating on increasing volume sales through special schemes in private labels rather than adding more products. It has reduced its private labels in fast moving consumer goods (FMCG) category to 290 from 350. In staples, private labels are more than 200. 

Sales from private labels are 19%-20% of the Aditya Birla retail's total sales. "We want to focus on individual categories and increase volumes rather than adding more products. We will be adding products as and when required in different categories," said Thomas Varghese, chief executive officer, Aditya Birla Retail Ltd. It is focussing on strengthening the food portfolio.

ABRL currently sells a range of private labels covering FMCG, apparels and footwear. Among its major in-house brands are More (staples), Blue Earth (apparels), True (footwear), Feasters (food based items), Kitchen's Promise (ready-to-eat) and Enriche (soaps and conditioners). Private labels in the stores are priced at 10%-15% less than branded labels.

The retail chain is also concentrating on increasing the customer base for its two-year old loyalty programme - 'Clubmore'. "We currently have a subscribed customer base of 1.3 million across India," said Mr Varghese.

The company plans to enter own branded consumer durables and electronics products when it has 14-16 operational hypermarkets. "By the end of this fiscal we shall have enough resources to introduce private labels in electronics. To begin with we will first introduce small appliances like irons, mixer grinders, beaters, etc. and then move to bigger white goods," said Mr Varghese.

Usually, private labels tend to be 5% to 20% cheaper than established brands. Retailers are able to cut out the distribution cost which they pass on to consumers.

Not only do private labels help retailers make more profits but these labels even help them to differentiate themselves from their rivals. And in the long run, they can use the private labels to additional attract customers.

Retailers are expanding their private label portfolio and targeting multiple consumer segments through tiered pricing and claims. Having established a significant presence in the household care segment, Indian retailers are now launching private labels in ready-to-eat foods, beverages and personal care. Retailers are building private label brands with product attributes that mirror national brands.

Adoption of private label by Indian consumers is not only based on price but also perceived quality. Success of private labels in the household category increases their propensity to try such prodcuts in the food and beverages and personal care categories.


SME exchange not immediately on the cards

BSE and MCX have filed their preliminary applications with SEBI to launch SME exchanges but there is little chance of this segment coming up in the near future

Since previous attempts to launch an exclusive platform for small and medium enterprise (SME) have failed, market regulator Securities and Exchange Board of India (SEBI) is moving cautiously about green signalling the idea again. The regulator is currently seeking feedback from the market to ascertain the impediments, which surfaced in its past efforts, to launch an SME exchange.

Unfortunately, this means that there has been no headway in finalising what the framework of an SME exchange will be. India has made two attempts to set up SME exchanges but both these attempts failed. The country's oldest exchange for SMEs, Over-The-Counter Exchange of India (OTCEI), was set up in 1989. It failed because of technology issues as well as regulatory confusion over what needs to be done to make it grow. The extremely lax regulations for new issues in 1994-95 encouraged companies to easily list in National Stock Exchange and the Stock Exchange, Mumbai (BSE), ignoring OTCEI. OTCEI also relied on the market-making system and market makers simply vanished after 1995. Under the next experiment, the BSE was directed to launch IndoNext Platform for SME in 2005 because that's what the then finance minister P Chidambaram wanted. But all BSE did was push out some poor quality and illiquid scrips to that segment.

SEBI is has been making some tentative attempts to launch an SME market for a few years now. The regulator came out with the guidelines for the SME exchanges on May 17, 2010.

"Attempts in India to establish exchange of small company is not a new attempt. Unfortunately these attempts did not work. A new attempt is being made. We will take a very constructive approach. We are conscious of the fact that small companies cannot bear the same kind of compliance cost that the bigger companies find it easy to do and therefore we are trying to reduce the compliance cost. As a regulator we need to keep a balance. We also need to protect the interest of the investor who are coming in and investing in their markets.

Compliance cost cannot be at the cost of not providing enough information to the investors who are going to invest. We are trying to do it in a manner where our chances of success improve" said C B Bhave at an event organised by small and medium enterprise (SME) Chamber of India, Mumbai recently.

Asia's oldest bourse BSE and the Multi Commodity Exchange (MCX) have filed a preliminary application with the capital markets regulator SEBI for launching an SME platform. "We have filed a preliminary application with SEBI for an SME exchange" said Madhu Kannan, MD & CEO, Bombay Stock Exchange (BSE).

Mr Joshep Massey, MD & CEO of Multi Commodity Exchange Ltd (MCX) also shared a similar plan "We have applied for an SME exchange." Even the National Stock Exchange is believed to have expressed its interest to launch an SME exchange. However, Mr Bhave did not clarify on the timeframe it is looking to launch this platform and said that "the ball is their (exchange's) court."


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