'Rules are made for tax babus': Tech entrepreneur says India is the only major economy with TDS 

Saurabh Chandra, a tech entrepreneur who is building Ati Motors, has sparked a conversation around India's tax policy, sharply criticising the practice of deducting tax at source (TDS) on business payments.

"Did you know, India is the only major economy with a TDS on business payments,” Chandra posted on X. "We are masters of crippling ourselves. Rules are made for ease of tax babus and not for citizens, businesses. 10% of revenue gone before you see it. Only in India."

Chandra questioned the political will behind maintaining such policies. “If only we had a strong government that could prioritise citizens over babus. Is there a politician who thinks TDS is an evil? Or if our advance tax regime is too onerous? None that I know. We don't need Mudra loans if all businesses suddenly have 10% more cash flow!"

When a user pointed out that the TDS amount is adjusted against income tax and refunded if excess, Chandra responded, "Cashflow matters. It matters much more for the business than the govt."

The post drew support from other entrepreneurs and professionals, who echoed concerns over how TDS affects day-to-day operations. Dr. Amit Thadhani, a surgeon, shared his experience from the early days of running a hospital. “This. For us, that 10% was more than our entire profit. Was worse when we were a startup hospital and losing money, but the 10% TDS was being deducted on gross sales which included doctors charges, pharmacy, outsourced services and consumables. Seriously affects cash flow."

Sankrant Sanu, founder of Garuda Prakashan, added that this was symptomatic of a deeper bureaucratic mindset. “This is true for every bureaucratic rule in India. They make rules that inconvenience 100% of the people to catch the 1%. Why? Because catching 1% would require the babu to work. Inconveniencing 100% is much easier. And much more rewarding for the bureaucrat.”

In the last few days, several entrepreneurs have voiced sharp criticism of the government system, citing red tape and bureaucratic inefficiencies as major obstacles to doing business in India.