The Income Tax Department, in its next drive, handing over a target of 50 cases per Assessing Officer for a survey or online TDS verification. It has 16 parameters that could be followed to pick up these cases. These criteria include cases of sick units or units with negative operating margins, cases indicating a negative trend in payment, cases of negative growth in payment of TDS against positive growth in Advance tax payment, etc.
These steps are crucial because the government set a direct tax collection target of over ₹18.23 lakh crore, or 10% more than what was actually collected in FY23.
Among other steps to increase collection, the TDS (Tax Deducted at Sources) mechanism is continually being improved, as per a senior official with the IT Department. Some actions have been recommended in the Central Action Plan for FY24 as part of continual development. Thus, the enforcement process includes an online survey and TDS verification, according to the officials.
| Heads of Tax | Revised Estimate (2022-23) | Actual (2022-23) | Budget Estimate (2023-24) |
|---|---|---|---|
| Corporation Tax | 8,35,000 | 8,28,629 | 9,22,675 |
| Taxes on Income (Incl. Wealth tax, etc.) | 7,90,000 | 8,28,937 | 8,72,950 |
| Other Taxes (SIT, etc.) | 25,000 | 3,871 | 27,625 |
| Total | 16,50,000 | 16,61,427 | 18,23,250 |
Furthermore, each Assessing Officer (AO) would pick up at least 50 cases, as per the planning. These cases will be selected based on information from the investigative wing or reports from the CPC (TDS) and from various other sources. The representative claimed that a set of 16 criteria had been proposed to take up the cases. These instances refer to situations in which the required TDS or TCS amounts have not been submitted following deductions.
They include examining the pattern of TDS payments in relation to other entities in a similar industry, cases showing a decline in payment, petitions related to tax evasion, cases flagged by the Assessing Officer (AO) with substantial disallowances, individuals or entities consistently filing TDS statements late or not at all, and also the cases of TDS payment decreasing while Advance tax payment shows positive growth.
An additional parameter might be the amount of advance tax deposit made in cases where a lower deduction certificate is provided. Similar cases may be considered for situations where taxpayers received lower deduction certificates in FY 2022–23 yet paid a significant amount of self-assessment tax for AY 2023–24.
In addition to these cases, other parameters would also be considered such as grievance petitions submitted by the deductee, sick units or units with negative operating margins, TDS evasion detected during the search and survey, cases where returns under TDS have been modified numerous times in the last years and where there is a significant reduction in the default amount, among other things.
Read also: Due Dates for E-Filing of TDS & TCS Returns for FY 2023-24
The officials informed us that there are some cases that may receive notices under Section 201/201(1A) even at the initial inspection. They added that a timeline is also being provided to execute the move. It was also notified about the completion of all the new online TDS verifications instigated in FY 2023-24 within six months of their commencement.
Additionally, giving directives under Section 201/201(1A) may be completed under the period of 6 months from the end of the month in which the survey started or prior to the end of FY in which the survey was brought in place.
The cases of the consequences where an individual fails to deduct or pay and mention a person defaulter in case of no deduction or tax deposit with the government would be dealt with under Section 201 of the Income Tax Act. In this default, Section 201(1A) authorized penal interest. On the outstanding tax amount, either for every month or part of a month, the rate would be one per cent applicable.
