FinMin verifying outward remittances in FY '12

FinMin verifying outward remittances in FY '12

FinMin verifying outward remittances in FY '12

 The Finance Ministry is verifying outward remittances worth Rs 3.56 lakh crore from India during 2011-12 as a major portion was not subject to tax deduction at source, a top official said on Friday.

"The Finance Ministry is currently engaged in verifying the remittances made abroad from India as over 70 per cent of remittances going out of India during the financial year 2011-12 were without any tax deduction whatsoever," Director Income Tax (International Tax), M S Ray said at an Assocham event on Friday. For 2011-12, there were 7,56,741 foreign remittances made from India with money worth Rs 3,56,461 crore going out of India, he added.

Ray said: "...out of this, tax deduction at source (TDS) made was Rs 12,676 crore representing just three per cent of the total remittances going out of India." He said Income Tax department is making efforts to verify the remittances and organising seminars and campaigns to spread awareness about consequences of withholding taxes in smaller towns. These efforts are paying rich dividends, he added.

Ray said that awareness about TDS, mainly in smaller towns and cities is not up to the desired levels. This is especially seen in places such as Ludhiana with large population of non-resident Indians, he added.

"The NRI population in these places is selling properties but while remitting the sale proceeds, people are not aware that TDS has to be made," he added.

Speaking about characterisation of income through royalty and fees of technical services, he said this is a major area of litigation and needs a coherent approach and understanding from both tax authorities and tax payers. Ray added that the department is providing various mechanisms for greater certainty in taxation and reduction in litigation. 

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