The Supreme Court on Friday refused to entertain a public interest plea (PIL) seeking the scrapping of the Tax Deducted at Source (TDS) system, describing it as arbitrary, irrational and violative of various fundamental rights”.

Declining to entertain the PIL questioning the TDS system, a bench of Chief Justice of India Sanjiv Khanna and Justice Sanjay Kumar told the petitioner, BJP leader and advocate Ashwini Upadhyay, that he may approach the High Court.

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“Sorry, we will not entertain. It is very badly drafted. You can move the High Court. Some judgments have upheld it. We will not entertain. Dismissed,” said the bench.

Contending that the TDS system disproportionately burdens an assessee with significant administrative expenses, the PIL petitioner has sought a declaration that the “TDS system is manifestly arbitrary, irrational and against Articles 14 (right to equality), 19 (right to practice profession) and 21 (right to life and personal liberty) of the Constitution, hence void and inoperative.”

Stating that the TDS system violated Article 14 by disproportionately burdening economically weaker sections and small earners who lack the capacity to navigate its technical requirements, the PIL had said that the imposition of tax collection duties on private citizens amounted to forced labour.

“The regulatory and procedural framework surrounding TDS is excessively technical, often requiring specialised legal and financial expertise, which most assessees lack. The result is an unjust shifting of sovereign responsibilities from the government to private citizens without adequate compensation, resources, or legal safeguards,” the PIL said.

While the TDS system, the PIL said, ensures steady revenue inflow for the government, it imposes substantial administrative and financial obligations on the assesses, which include determining applicable TDS rates across various provisions, deducting taxes before payments or credits, depositing taxes with the government treasury within specified timeframes, issuing TDS certificates to deductees, filing returns and ensuring compliance with frequent legal amendments and defending against assessments, penalties in cases of inadvertent non-compliance.

The TDS framework under the Income Tax Act mandates the deduction of tax at the time of payment by the payer and its deposit with the income tax department. These payments include salaries, contractual fees, rents, commissions, and other taxable sums. The deducted amount is adjusted against the payee’s tax liability.