FILLING LOWER TDS? GET READY FOR A CALL FROM I-T

CA Nikita , Last updated: 04 October 2007
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Individuals trying to evade taxes by getting a lower tax deducted at
source may soon get a call from the tax collector. The finance
ministry is planning to crack the whip on those trying to conceal
their income and evade taxes through the system of tax deduction at
source (TDS). The Central Board of Direct Taxes (CBDT) has mooted a
proposal to strengthen the penal provisions against such people. The
ministry is planning to introduce cash penalties as well as initiate
legal proceedings and prosecute those it finds guilty of evading
taxes through TDS. In addition, it is also set to permit evoking
section 131 of the Income Tax Act, which gives the power to summon
the person, investigate and enquire into his income, and impound and
retain account books and documents of the person. Official sources
told FE that the proposal is at present being whetted by the law
ministry, and it is likely to be implemented in coming months. As
another part of this initiative, the CBDT has also written to all
state finance ministers and state chief secretaries that there
should be a quarterly deduction of TDS, instead of the current
practice of book adjustments. States are now expected to timely
credit their TDS collections to the Centre's account. These steps
would be in line with a number of measures the CBDT has already
taken this fiscal to strengthen and restructure its TDS machinery.
It has created 12 new TDS commissionerates and a director to monitor
them in its efforts to strengthen the TDS mechanism. It has also
begun audits of many government departments, such as railways and
defence, where TDS collection is low to find out the causes for
this – www.financialexpres s.com