The Income Tax Department is preparing to run a major campaign across the country. Officials say that the campaign will be against those people and companies who have not deducted or deposited TDS / TCS. About 40,000 such taxpayers are under investigation. This action is being taken on the basis of tax deducted in the financial year 2022-23 and 2023-24.
The Central Board of Direct Taxes (CBDT) has prepared a 16-point plan to catch TDS defaulters. Apart from this, the data analytics team has prepared a complete list of such taxpayers for investigation. A senior official said, ‘We have the data of the analytics team. If someone has not deposited the tax, then we will first inform them about it.’ Officials will focus on repeat rule breakers.
They will investigate cases where there is a big difference between tax deduction and advance tax payment. Cases where there have been frequent changes and corrections in the name of the deductor will also be investigated. Also, those companies will be investigated which have used sick units or loss making companies in their audit.
What the law says
The board has asked assessing officers to report cases of large disallowances under section 40(a)(ia) of the Income Tax Act. This section disallows deduction in cases where TDS has not been deducted or deposited with the government. Tax officers will also keep a close watch on cases where TDS returns have been amended multiple times and the default amount has come down significantly.
The board has asked field officers to also pay attention to complaints filed by deductors. Use data analytics to identify patterns and irregularities in TDS payments. The official said that like the department’s earlier campaigns, no one will be harassed in this too. In this year’s budget, the central government has announced rationalization of TDS and TCS rates. The number of rates and the limit of TDS deduction have been reduced.
Action on defaulters
The official said, ‘TDS compliance has been relaxed for honest taxpayers. But strict action will be taken against those who deliberately default. This will make the tax system fair and equitable.’ The government hopes that this campaign will reduce tax evasion and increase revenue. Also, honest taxpayers will get encouragement. This will also strengthen the country’s economy.
