SC dismisses PIL calling for abolition of TDS system

The Supreme Court yesterday dismissed a public interest litigation (PIL) that called for the abolition of the Tax Deducted at Source (TDS) system under the Income Tax Act. The bench of 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 plea, labelled the



TDS mechanism as arbitrary and irrational, claiming it infringed on several fundamental rights, including the right to equality. The system, a standard practice in many nations, requires the payer to deduct tax at the time of payment and deposit it with the income tax authorities, with the amount being adjusted against the payee’s annual tax liabilities.