Sluggish TDS growth: CBDT asks I-T dept. to take urgent steps

“There is an urgent need to step up efforts for augmenting TDS collections.” CBDT Chairman writes in his directive to field offices of the I-T dept.

HYDERABAD (AP) -12-03-2012 - BL/ BUDGET RELATED PIC / STAND ALONE : -Will the ceiling on Income Tax go upor down in the Union Budget 2012-13 as a hoarding of a bank suggests in Hyderabad on Monday . -- PHOTO: P.V.SIVAKUMAR .

With revenue collection from the TDS category witnessing a sluggish pace, the CBDT had asked the Income Tax Department to pull up its socks and take “urgent” steps and also conduct survey operations to shore up the funds.

Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra has issued a stern directive to all the field offices of the I-T Department in this context and has sought an action taken report in less than a month’s time.

In his letter, accessed by

PTI , Mr. Chandra has expressed his “disappointment” over the growth rate under the Tax Deducted at Source (TDS) collections, saying some regions (I-T ranges) in the country were showing negative or single digit figures.

In view of this, he wrote, “There is an urgent need to step up efforts for augmenting TDS collections.”

“A few indicative steps in this regard are conducting more TDS surveys to check large scale non-deduction or under deduction of taxes at source as well as non-deposit of taxes already deducted,” the chairman told his principal chief commissioners.

Mr. Chandra also directed the department that all cases, where TDS payment by the deductors in the current year is more than 10% lower than the payments in the corresponding period of last year, “may be examined on priority for possible spot verification or survey based on the compliance background of the deductors.”

The CBDT chief asked the taxman to “ensure” that the TDS deducted by the State and Central government departments are duly collected.

According to official data, the TDS revenue collection till August 31 was over ₹1.65 crore which reflects a growth rate of 10.44% over the corresponding period of the last fiscal.

However, this rate also shows a “significant decline” of 7% over the last financial year, when the growth rate was 17.44%.

The department has also been asked by the CBDT chairman to monitor TDS collections under section 194-IB of the Income Tax Act (payment of rent by certain individuals or Hindu undivided family) and section 194-IC of the same Act (payment under specified agreement).

The department has also been asked to keep a tab on TDS “defaulters” and been instructed that criminal prosecution complaints should be filed in such instances, on a case-to-case basis.