Budget 2012: Finance Panel Recommends Less TDS for Senior Citizens

Parliament’s standing committee on finance has proposed a less burdensome Tax Deduction at Source (TDS) for Non-residents and senior citizens. The committee has suggested Direct tax Code (DTC) that there should not be any TDS on interest earnings from fixed deposit investments of senior citizens. The member of the finance panel said that they want tax deduction at source regime to be less tedious.

At present, on interest income in excess of Rs.10,000 per annum has TDS at 10%. However, senior citizens can submit a special form called Form 15H for preventing deduction if they have no taxable income.

But if the tax authorities feel that income had accrued in India, the DTC overrides the provisions under double taxation avoidance agreements. Tax experts favor an explicit provision, saying these benefits are available under the present law and these should be carried into the DTC. So, the finance panel wants a specific provision in the code to clear this uncertainty.

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