EY Urges Major TDS Overhaul for Budget 2026: Simplify Rules, Cut Compliance Burden
Budget
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CNBC TV18•08-01-2026, 19:14
EY Urges Major TDS Overhaul for Budget 2026: Simplify Rules, Cut Compliance Burden
- •EY proposes a significant overhaul of the Tax Deducted at Source (TDS) framework for Budget 2026, citing its current complexity and high compliance burden.
- •The existing Income Tax Act has nearly 37 different TDS provisions, leading to disputes, interpretational challenges, and increased costs for businesses.
- •EY recommends consolidating TDS into 3-4 broad categories, including salary-linked, punitive rates for gambling, and 1-2 standard rates for other payments.
- •The firm also seeks the removal of the 0.1% TDS on transactions covered by GST, arguing it's redundant due to digital tracking and creates duplicate compliance.
- •Simplifying TDS would reduce ambiguity, lower litigation risks, and ease compliance for businesses without impacting revenue, especially with improved GST-direct tax integration.
Why It Matters: EY pushes for TDS simplification in Budget 2026 to ease business compliance and reduce tax disputes.
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