Date:07/07/2008 URL: http://www.thehindu.com/2008/07/07/stories/2008070750031600.htm

Business

Banks can educate customers

I saw your response to the senior citizen’s complaint about deduction of tax on interest when he is not liable to tax at all. You have rightly pointed out that deduction has to be made and it was for the senior citizen to have avoided it by giving the declaration required to say that he is not liable to tax or he can get a refund. Everyone knows the hassles in getting the refund. It is also clear that it is his ignorance that has landed him in difficulty. But how many people know that they can avoid TDS. Banks do not educate their customers. Still can it not be said that there was deficiency in service in the bank, which has led to infructuous work of the collection of tax and refund by the department. This is a wasteful compliance of the law which can be easily avoided by using latest technology. I think both the department and the banks should join together to have a database of customers who do not have taxable income and avoid TDS in their case by reminding them to file the relevant form where TDS can be avoided.

The above reaction to the comment in these columns in The Hindu dated June 23 by Justice T. N. C. Rangarajan, Hyderabad, merits consideration on the part of the bank and tax administration. Even if there be no deficiency of service in not advising deposit-holders of their rights, it will greatly enhance customer-relationship for a bank, which undertakes such service and gives itself a competitive advantage for deposit mobilisation. Banks have to educate their employees to carry out duties relating not only to bank’s obligation, but also advise their customers of theirs.

S. RAJARATNAM