The Central Board of Direct Taxes (CBDT) today directed its field formation to levy the highest penal rate of tax on TDS (tax deducted at source) defaulters.
Following a sharp shortfall in revenue from TDS collection, the Income Tax Department has launched a massive drive across the country to detect and inquire into TDS payments of companies — especially on payments made and salaries disbursed. Tax searches have revealed that several small and medium scale companies, deducted tax on various payments but failed to deposit the amount with the department. In such cases, it has been decided by the board that the departments can charge the highest level of penal rate of tax – that is 300 per cent. Besides, the income tax department has disallowed all expenses incurred by third party administrator companies (TPAs) across the board. The existing practice is to deduct the expenses from the total earnings before arriving at the taxable income. Department officials said the decision to disallow the expenses have been taken since they do not deduct tax while paying premium to the insurance companies. The department has raised around Rs 117 crore in TDS amount from six TPAs. The disallowance of expenses comes under section 40I(a)(i) of the Income tax Act 196 that is invoked for non payment of TDS. Officials said a similar amount has been disallowed as deduction from income. Searches have revealed that TPAs have not been deducting TDS on premium payments, even though the CBDT had come out with a separate notification to charge TDS on premium payments made by TPAs. TPAs are third party administrators who processes insurance claims and provides certain aspects of employee benefits for a separate entity. While the CBDT has collected Rs 35,510 crore from TDS in the Mumbai region this financial year (against total tax collections of Rs 98,550 crore), for the same period last year they had recovered Rs 36,312 crore (from the total regional collection of Rs 93,000 crore). The target for collection of TDS in the current financial year for the region is Rs 58,000 crore. About 40 per cent of Mumbai’s total tax collections are from TDS, and the region also makes for the bulk of the all-India collections under this head. Earlier, the department had conducted a survey of all major mobile telecom companies, with the idea of taxing discounted cash cards sold to retailers. Mobile companies sell cash cards to retailers at a discounted rate but then these are sold to customers at the maximum retail rate, earning a profit. “The companies should have deducted tax before selling cash cards to retailers,” said an official. Source : http://www.business-standard.com/india/news/charge-maximum-penal-amounttds-defaulters-says-cbdt/388483/ -- Me on net : > >>>>>>>>>>>>>>>>>>>>> http://rajkumaratthenet.blogspot.com/ http://itronline.blogspot.com/ Virus Warning: Although the I have taken reasonable precautions to ensure no viruses are present in his email, sender (I) cannot accept responsibility for any loss or damage arising from the use of this email or attachment." -- You received this message because you are subscribed to the Google Groups "Skorydov MyTaxAssistant Member Group" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/skorydovmytaxassistant?hl=en.
