Large-scale TDS defaults found in govt, private sectors

 The Tax Deduction at Source (TDS) wing of the Income Tax Department in Bengaluru has found non-remittances, non-deductions and non-TDS filings in large numbers.

The tax flaws emerged during a mass audit the TDS wing conducted on February 9 and 26 covering 76 cases involving both the government and private sectors.

It found deductors did not remit Rs 51 crore of deducted money to the government account, while some organisations did not deduct taxes on expenses amounting to Rs 508 crore, including non-deduction of TDS on interest payments, payment gateway charges, commission and contract payments, year-end provisions and payments on cloud-based services.

In the wake of the large-scale TDS defaults, it is contemplating similar action in the near future, the I-T department said in a release.

The department’s tracer system uncovered a huge pending arrear demand against various deductors. It is taking coercive measures to recover long-outstanding demands by attaching bank accounts, debtors and immovable properties.

As the end of the financial year is nearing, the department advises all deductors to deduct TDS and remit it to the government account, according to the provisions of the Income Tax Act.

The department also asks all deductors through the release to note that, aside from interest, late fee and penalty, default in deduction and remittance can lead to arrest and prosecution, resulting in long sentences.