The Income Tax Department has set a target of 50 cases per Assessing Officer for survey/online TDS verification, reported Business Line.
It has prescribed 16 parameters on which these cases could be picked up. These include negative growth in TDS payment against healthy growth in advance tax payment, cases of sick units or units with negative operating margins, and cases showing a negative trend in payment.
These measures are important as the government has set a target of collecting over ₹18.23lakh crore through direct taxes, 10 per cent more than the actual collection in FY23. A senior IT Department official said that among the measures to boost collection is continuously improving the TDS (Tax Deducted at Source) mechanism.
“As part of the continuous improvement, some steps have been prescribed in the Central Action Plan for FY24. Accordingly, enforcement action comprising survey and online TDS verification has been structured,” the official said.
Cases where a lower deduction certificate is availed but higher advance tax deposited could be a redflag. Similarly, cases where lower deductions were availed of in FY 2022-23 but substantially high self-assessment tax was paid for AY 202324 could be considered.
Parameters also include cases where frequent corrections have taken place and where the name of the deductee is changed regularly, cases of sick units or units with negative operating margins, grievance petitions filed by the deductee, TDS evasion found during a ‘search and survey’ and where TDS returns have been revised multiple times in the previous years and where there is a substantial decrease in the default amount among others.
“Based on preliminary examination in selected cases, notice under Section 201/ 201(1A) may be issued,” the official said while adding that the timeline is also being given to complete the action.
“All the new online TDS verifications initiated in FY 2023-24 should be completed within six months of initiation. Also passing of order under Section 201/201 (1A) may be completed within six months from the end of the month in which the survey took place or before the end of financial year in which the survey is conducted,” he said
Section 201 of the IT Act deals with the consequences of failure to deduct or pay and declares a person defaulter in case of no deduction or tax deposit with the government. For such default, Section 201(1A) prescribes penal interest.