I-T to scan salary slips of top executives for TDS

Officials suspect tax evasion under guise of perks, reimbursements

The Income-Tax Department has decided to scan the salary structure of top executives of large corporates and public sector units (PSUs) to examine hidden tax opportunities in their perks and reimbursements.

During its recent deliberation with top officials of the Central Board of Direct Taxes (CBDT) here, the I-T department has decided to strengthen its tax deducted at source  (TDS) regime in order to collect more revenue under this category.

The department is particularly bolstered by the fact that a big chunk of 41 per cent, in the total tax collections in the last fiscal, came from the TDS category alone.

During financial year 2012-13, taxes amounting to Rs 2,30,188 crore were collected under the TDS category while the total direct taxes collection stood at Rs 5,58,970 crore.

The department has tasked its TDS collection offices to focus on the "full salary structure" of top executives of big companies, PSUs and those firms which employ a large workforce.

The CBDT also asked its TDS commissioners to check the categorisation of certain employees in these firms as “consultants” and look for taxing opportunities in the allowances, perks and reimbursements made to them.

Not only employers, the department now plans to mount effective vigil to obtain TDS tax from universities and educational institutions which make payments to guest lecturers. Payments made to event managers and to medical transcription companies will also be brought under strict regulation of TDS, a senior I-T official said. “This will be done under 194J of the I-T Act which deals with fees for technical or professional services,” the official said.

The department will also ensure collection of tax collected at source from buyers of scrap and mineral companies at the rate of 1 per cent. The rate will be 2 per cent in this category for awarding the lease for parking lots and toll plazas.