The Supreme Court has been approached with a Public Interest Litigation (PIL) calling for the abolition of the Tax Deducted at Source (TDS) system, which the petitioner claims infringes upon fundamental constitutional rights. Filed by lawyer Ashwini Upadhyay, the plea targets the provisions under the Income Tax Act that mandate the preemptive deduction of taxes at the source of payment.
The PIL, represented by advocate Ashwani Dubey, argues that the TDS system is “arbitrary and irrational” and contravenes Articles 14 (Right to Equality), 19 (Right to Practice Profession), and 21 (Right to Life and Personal Liberty) of the Constitution. The plea has named the Centre, the Ministry of Law and Justice, the Law Commission, and NITI Aayog as respondents.
Challenges Highlighted in the PIL:
– Administrative Burden: The petition emphasizes the substantial administrative load and financial strain placed on taxpayers, including the complexities of adhering to TDS regulations, issuing certificates, filing returns, and avoiding penalties for minor errors.
– Economic Impact on Lower Income Groups: It points out that the TDS system disproportionately burdens economically weaker sections and smaller earners who may find it difficult to navigate its technical requirements, thus allegedly violating Article 14.
– Violation of Personal Liberty: Referencing Article 23, the petition also describes the enforcement of tax collection on private citizens as a form of “forced labor.”
Moreover, the PIL criticizes the TDS framework for its “excessively technical” regulatory and procedural requirements, which demand specialized legal and financial expertise that many taxpayers lack. This, according to the plea, results in an unfair transfer of governmental responsibilities to private individuals without proper compensation or legal protections.
The petitioner has urged the apex court to not only declare the TDS system unconstitutional but also to direct NITI Aayog to review the plea’s contentions and propose necessary modifications to the system.
