Entities required to deduct tax while making payments could face a close scrutiny of their returns by the income-tax department as it gears to check payment defaults and boost collections.The I-T department is contemplating scrutinising TDS returns on the lines of income tax and corporate tax returns to ensure that those required to deduct tax at source are complying with the rules and depositing due taxes.
“Enhancing collections from TDS is one of the focus areas for the I-T department,” a department official said. The fact that collections rose to more than Rs 1,50,000 crore in 2009-10 as compared to Rs 70,689 crore in 2006-07 and now contributes nearly 40% of the total tax collections itself explains why the tax authorities are eyeing it as a focus area.
The proposal, a part of the road map to strengthen the regime for TDS, figured at the annual conference of the chief commissioners and director generals.
Scrutiny assessment usually involves a detailed examination of the returns filed so as to check the veracity of the claims, while normal assessment is cleared on the face value of the assessments. At present, selection of returns for scrutiny is computer-based.
A closer scrutiny of the returns could help the department catch hold of those who have failed to deduct tax while making payments.
The tax authorities have already begun to carry out extensive surveys to catch TDS offenders. A total of 8,828 surveys and inspections were carried out last fiscal.
The I-T department had found a number of organisations, including some within the state sector as well, that deducted tax but did not deposit it with the department. In some cases it was also found that deductors were deducting tax at a lower rate.
I am another victim of such malaise by PSU banks.
They deduct the TDS religiously at the applicable rate before each quarterly credit to the accounts of customers. And then they do not deposit it all the time! I proved it to them using simple math that they could not refute even after analysing it with all their CAs.
One bank official argued that they do not have any means of holding the sum deducted if they do not deposit it. But I argued that it could make its way up to bank profits via the suspense accounts. Or it could be pocketed by the bank officials. I said it has the potential of a huge scam if even there is a mistake of 10 rupees in each TDS deduction.
The Income Tax department is penalizing assessees for Form 26AS errors who hold valid Form 16A from these banks instead of going after these banks which are openly and blatantly violating statutory obligations.
Over and above the report in the newspapers regarding corruption in the income tax department is highly disturbing especially with the Supreme Court making such comments.
Is there any hope in this country for the hapless assessee?
The government can at least strictly warn income tax department not to harass assessees whose Form 26AS have only TDS errors if they hold Form 16A issued by banks for the returned income and TDS
Such action is overdue from tax authorities as many deductors are not complying with rules. Also many deductors are issuing incomplete Form 16A where full details as required to be filled in the form are left blank. Many PSU banks have adopted a careless and could not care attitude.
TDs details appearing on NSDL site are not complete and they donot tally with TDS certificates.
Inconvinience for individuals who have numerous FDR with the bank. I’ve found 2 TDS certificates with different total TDS deducted compared to the computer print out given by the bank.
The Bank out source the issue of 16A cert. When the Bank was confronted they simply find themselves helpless and assume the computer print out issued by them (Bank) as the correct Total TDS. Reason given data entry from out source can cause erroneous entry. Now even the NDSL have miss entries. The onus seems left with the individual tax payer. Hoping for better coordination with Banks/out source/NDSL. It is a pain .
Tax deductors issuing 16A are always not correct, for which the deductee suffers. Why not Govt. consider some sort of authentication by govt on 16A, so that the deductee’s claim can be fully admitted?