Mumbai, March 5, 2018
The Income Tax department today unearthed irregularities worth Rs 3,200 crore pertaining to TDS (Tax Deducted at Source) accounts of some entities and individuals in Mumbai.
According to an investigation between April 2017 to March 2018, 447 companies deducted tax from its employees but did not deposit the amount and diverted it to further their own business interests.
Income Tax department's TDS wing has started prosecution proceedings against the firms and in some of the cases, warrants have also been issued.
The offences under IT act attract a minimum punishment of rigorous imprisonment of 3 months to a maximum of 7 years plus fine. Prosecution is initiated under Section 276-B.
However, sources in IT dept claims, "It is not a scam - but a very common verification survey details. Every year, its done. Quantum may vary year to year. This is just like an employer deducts TDS on salary but did not deposit on time."
WHAT IS TDS?
Tax Deducted at Source (TDS) is a means of collecting income tax in India, under the Indian Income Tax Act of 1961.
Under this Act, any payment covered under these provisions shall be paid after deducting prescribed percentage.
It is managed by the Central Board for Direct Taxes (CBDT) and is part of the Department of Revenue managed by Indian Revenue Service . It has a great importance while conducting tax audits. Assessee is also required tofile quarterly return to CBDT.