The Income Tax Department has detected a default of around 470 crore TDS (Withholding Tax) rupees by some large Delhi-based companies after investigations were recently carried out against them, they reported. officials said.
The TDS wing of the department in Delhi has launched special oversight of private companies and government organizations to ensure that taxes due are deducted under this category of direct taxes in the last quarter of this fiscal year which ends. ends March 31.
TDS contributes more than 40 percent of the collection under the direct tax category.
Officials said the nation’s capital-based TDS wing recently visited the premises of a budget hotel and guesthouse aggregation company and found it did not deduct tax (TDS) on approximately 280 crore rupees paid on rentals over a seven year period. .
Likewise, an airline was found in default of Rs 115 crore TDS and some companies involved in the real estate business were in default of Rs 75 crore.
Real estate groups have also been accused of bogus tax deductions by applying bad TDS rates and therefore deducting taxes at lower rates, they said.
Officials did not disclose the identity of the companies.
In two other cases, officials said, defaulting entities were convicted by local courts in the Delhi area on charges of mistakenly inferring or failing TDS.
In the first case, a fine of Rs 6 lakh was imposed while in the second, a sentence of six months imprisonment was accompanied by a fine of Rs five lakh.
In accordance with the regulations, the tax collected or withheld at source is paid to the credit of the central government within seven days of the end of the month in which the withholding is made.
The IT department has started to conduct an increased number of investigations (visiting a company’s business premises for audit checks) to verify violations such as non-remittance of deducted TDS, failure to prepare reports and deductions made at a lower rate after finding that the deductors were in default on those payments.