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TDS on cumulative deposit

This complaint from R. Sankara Raman, Salem, and some others points out that there is no uniform treatment in this regard.

This is a matter for the Income-tax Department to sort out. Now that serious attention is being paid for tax deduction at source, it can be hoped that such complaints will be resolved. In fact, there are some bank branches which have altogether neglected this duty to deduct tax, while on any action taken by the authorities to enforce tax deduction, banks react by deduction of past amounts from current payments belatedly and even interest payable by the bank for the delay is debited to the account of the deposit holder.

Such complaints have been aired in these columns. It was pointed out that interest payable by the bank for delay for its deduction cannot be passed on to the deposit-holder.

There is a case for the Income-tax Department to ensure proper tax deduction at source from banks and other public financial institutions. Since Sec. 199 would require that tax and tax credit should be matched, tax deduction on the basis of accrued income annually in respective cumulative deposits will be in order.

The complaint of many branches is that they do not have adequate staff to deal with the work involved. In fact, necessary knowledge is also lacking in many branches.

It is a matter which should be resolved by the tax administration jointly with the top level administration of such banks and financial institutions.

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