Income Tax Department sets target of 50 Cases per AO for TDS Check

The Income Tax Department has set a target of 50 Cases per Assessing Officer (AO) for survey/Online TDS Verification. 16 parameters have been prescribed on the basis of which, the survey can take place.

The Parameters include negative TDS growth against healthy advance tax payment, cases on sick operating units, and units with low or negative profit margins. Cases showing negative TDS trends will also be included.

Cases where a lower TDS Certificate was availed and High Advance Tax was deposited could be a Red Flag:

Cases where a lower tax deduction certificate was taken and a High Advance Tax or self-assessment tax was deposited will be examined. TDS returns with frequent revisions will also be under the watch.

Consequences of failure to deduct or pay is dealt with by Section 201. As per section 201, if any person who is liable to deduct tax at source does not deduct it or after so deducting fails to pay, the whole or any part of the tax to the credit of the Government, then, such person, shall be liable to pay simple interest as given below:

• Interest shall be levied at 1% for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax was deducted.
• Interest shall be levied at 1.5% for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax was actually remitted to the credit of the Government. In other words, interest will be levied at 1% for every month or part of a month for delay in deduction and at 1.5% for every month or part of a month for delay in remittance after deduction.

As per section 201, a payer who fails to deduct whole or any part of the tax at source is treated as an assessee-in-default.