A major portion of the revenue by way of income-tax is recovered through deduction of tax at source. Thus, in-depth verification of all the TDS returns is necessary. Even though for furnishing the information required under clause 34 of Form No. 3CD, an in-depth verification of the TDS returns is done, an independent audit provision only for audit of TDS returns would reduce the mismatch and other challenges being faced by the Department.
It is suggested that an independent audit provision may be inserted to provide for a comprehensive audit of all the TDS returns filed with the Department. Appropriate forms of audit report can be prescribed to certify the correctness of the quarterly TDS returns. This will enable the Department to be rest assured about the correctness of the TDS returns filed as well as the remittance of the tax deducted at source to the credit of the Central Government.
(SUGGESTIONS FOR RATIONALIZATION OF THE PROVISIONS OF DIRECT TAX LAWS)