Supreme Court dismisses PIL seeking abolition of TDS system

The Supreme Court on Friday dismissed a Public Interest Litigation (PIL) that sought the abolition of the Tax Deducted at Source (TDS) system under the Income Tax Act.

A bench comprising Chief Justice of India Sanjiv Khanna and Justice Sanjay Kumar ruled the plea as poorly drafted and advised the petitioner to approach the High Court instead.

The PIL argued that the TDS mechanism is arbitrary and irrational, claiming it infringes on several fundamental rights, including the right to equality.

The TDS system, a common practice in many countries, requires the payer to deduct tax at the time of payment and deposit it with the income tax authorities. This amount is then adjusted against the payee's annual tax liabilities.

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