The department is eyeing tax deducted at source (TDS) as a major source of additional revenue in the current financial year.
The advance tax collections in the fiscal may fall as the manufacturing and petroleum sectors are likely to be impacted due to high interest rates and aftermath of an administered price regime.
Under the Income-Tax Act, 1961, firms and government departments have to deduct tax at source. The TDS rate varies between 1 per cent and 30 per cent depending on the kind of expenditure.
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By Mr Chitranjan, Section Taxation - Income Tax
Posted on Tue Jul 08, 2008 at 01:17:32 AM EST
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The tax department has identified about 24 categories of services where it feels that TDS norms are not being followed in full.
Annual maintenance charges paid by companies and government departments, lease rental for mobile transmission towers and payments by third party insurance agents to hospitals, among others, are some of the transactions that have been put under the scanner.
The department is also closely examining the heads under which payments are being made by deductors.
In addition, payment of interest on loans taken from sister concerns by firms and companies, payments made for hiring vehicles, helicopters and aircraft on charter basis and leading hotels paying annual rents and other charges.
Recently, Income-Tax authorities detected short deduction of tax by a Gujarat government entity, which had deducted tax at the rate of 2 per cent while the applicable rate was 20 per cent. The department hopes to recover nearly Rs 190 crore from the company.
The department is also closely examining the heads under which payments are being made by deductors. A meeting of Commissioners of Income Tax (TDS) is being held later this week at Bangalore to discuss various aspects of non-compliance.
Source: Prashant K Sahu Business-standard 08/July/08
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