Big news for income tax payer’s. The Income Tax Department is gearing up for a nationwide campaign. Officials have indicated that this initiative will target individuals and businesses that have failed to deduct or deposit TDS/TCS. Currently, around 40,000 taxpayers are being investigated. This action is based on tax deductions from the financial years 2022-23 and 2023-24. The Central Board of Direct Taxes (CBDT) has put together a 16-point strategy to identify TDS defaulters. Additionally, the data analytics team has compiled a comprehensive list of these taxpayers for further scrutiny.
A senior official mentioned, “We have information from our analytics team. If someone hasn’t paid their taxes, we’ll notify them first.” The focus will be on repeat offenders, particularly those with significant discrepancies between tax deductions and advance tax payments.
They will also look into cases where there have been numerous changes and corrections in the deductor’s name, as well as companies that have reported losses or used sick units during audits.
As for the legal side, the board has instructed assessing officers to flag cases with substantial disallowances under section 40(a)(ia) of the Income Tax Act. This section prevents deductions when TDS hasn’t been deducted or paid to the government. Tax officers will also monitor cases where TDS returns have been amended multiple times, especially if the reported default amount has decreased significantly.
The board has instructed field officers to pay attention to complaints from deductors as well. They should use data analytics to spot trends and issues in TDS payments. An official mentioned that, similar to previous campaigns, there won’t be any harassment involved this time either. In the recent budget, the central government has proposed changes to TDS and TCS rates, cutting down both the number of rates and the limits for TDS deductions.
Regarding defaulters, the official stated, “We’ve made TDS compliance easier for honest taxpayers. However, we will take strict measures against those who intentionally default. This approach aims to create a fair and just tax system.” The government is optimistic that this initiative will help curb tax evasion and boost revenue, while also providing support to honest taxpayers, ultimately strengthening the economy.