Budget 2016: Budget May Offer TDS Relief To Taxpayers

The government is considering rationalising tax deducted at source, according to recommendations made by the R V Easwar Committee.

Officials said the changes in tax deducted at source (TDS) rates and thresholds would not have a significant revenue impact. Revision of the tiny annual limits, which were long overdue, would, however, benefit small depositors and pensioners, they added. "For the Budget 2016, we will be looking at recommendations that do not have large revenue implications. For the rest, we will have to do the math on the tax revenue foregone," said a government official.

The panel has suggested reducing the short-term capital gains tax on annual earning of less than Rs 5 lakh from trading of shares and not treating it as business income. This will have a significant revenue implication when the government is trying to lower the fiscal deficit to 3.5 per cent of the gross domestic product (GDP) in Budget 2016-17 from the projected 3.9 per cent in 2015-16.