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Concerned over latest shortfall in TDS revenue collections, the Income Tax department has decided to enhance prosecution action against large defaulters with the help of its specialised electronic database and processing centre created for this exclusive task.
The department's Central Processing Centre-Tax Deducted at Source (CPC-TDS) based in Ghaziabad in Uttar Pradesh has been instructed to inform and timely update the taxman about defaulters under this category, which is witnessing a 50 per cent slump in growth this time as compared to the last financial year.
While according to the standard operating procedures, any default of delayed TDS payment above Rs 1 lakh is mandatorily taken up for prosecution, the said data centre has been re-instructed by CBDT (apex policy-making body of the I-T department) to "generate a list of non-filers of TDS statement within one month of the due date and communicate it to the Assessing Officer (TDS) with a copy to the I-T Commissioner of TDS."
"CBDT has now asked CPC and the I-T department to scrupulously adhere to these guidelines and even prepare an advance plan for checking default in this regard as TDS is an important category of taxes under the overall direct tax kitty of the central government. A slow growth rate has been seen in this category recently but things will shore up," a senior I-T officer said.
CPC-TDS provides comprehensive data on compliance behaviour of the deductors, defaults details, PAN errors, besides helping the deductor or the department to identity and rectify mistakes in this domain. TDS is deducted and collected from categories like salaries, immovable property, rent and few other heads.
"The strategy to augment revenue through TDS has to be a mix of enforcement, capacity building and leveraging of information that is now available with the department through CPC (TDS)," the officer said.
According to latest data, the growth in TDS collections is less by 50 per cent this time as compared to the last period. In the 2013-14 financial year, the growth under this head was 16.73 per cent while in the current fiscal of 2014-15 the growth percentage is just 7.84 per cent.
Under TDS, the overall gross direct tax collection during 2013-14 fiscal was Rs 2,71,069 crore and this was a 17.88 per cent growth over the collections shown under this head from Rs 2,29,943 crore during 2012-13.
TDS has been contributing over 37 per cent to the gross direct taxes collection, emphasising its ever-growing importance in the direct taxes scheme of revenue collection.
The current fiscal ends on March 31. Some other instructions by the Central Board of Direct Taxes to CPC include asking them to generate a list of "defaulters in delayed payment of Rs 25,000-Rs 1 lakh alongwith default sheets for the year as well as proceeding year and subsequent year to help Commissioner (TDS) and
Assessing Officer (TDS) to identify cases fit for prosecution based on facts and circumstances of the cases within one month of the filing of the quarterly TDS statement."
The budgeted target under the direct tax category is fixed at Rs 7.36 lakh crore for the current fiscal (2014-15) and as per CBDT it has collected Rs 5,46,661 crore till January 23.