Finance Ministry asks banks to deposit March TDS by month end
March, 30th 2015
Worried over the shortfall in the overall direct tax collection kitty, the government has asked banks, both public and private, to not delay remitting of TDS funds of the current month into state coffers and do the same within the current financial year ending in March.
The Income Tax department and its apex policy making body, the Central Board of Direct Taxes (CBDT), are wary that the growth registered this time under the Tax Deducted at Source (TDS) category is less than half as compared to the corresponding period last fiscal.
According to official data updated till March first week, TDS collections stood at 7.49 per cent as against 16.69 per cent in the same period last year.
"The situation of tax collection under TDS category remains challenging even at the end of March now. There is a big slowdown in construction, manufacturing and other physical work projects in the country which is taking a toll on TDS and Tax Collection at Source (TCS) categories.
Meeting the direct taxes revenue collection target this time is looking quite challenging, perhaps it may not be met even and miss by a whisker," a senior I-T official said.
The official said keeping in mind this situation, the Department of Financial Services (DFS) under the Finance Ministry has asked all public sector and private banks to "ensure that tax deducted during the month of March, 2015 is remitted to the government account in March itself".
"The CMDs, MDs of public banks and the Indian Banks' Association have been asked for compliance in this regard by the DFS.
Also, the Revenue Secretary has written to Chief Secretaries of all states, requesting them to suitably direct the officials concerned to ensure proper tax collection at sources (TCS) on lease/license/contract for mining and quarrying and for parking lot and toll plazas," the officer said, quoting official communications made in this regard by the Finance Ministry and the CBDT recently.
Sources said the CBDT has asked the I-T department to conduct special drives against TDS defaulters and advance tax payees so that the revenue under these heads reflects in the total collection figures which will be capped on March 31.
Laying stress on special drives against TDS defaulters, the officer said, "Take for example, the action done by Principal Chief Commissioner of I-T for Karnataka and Goa where it detected TDS default in the current fiscal of Rs 117 crore by various business sectors in the two states. A total of 16 prosecution cases against willful defaulters were also launched under this drive."
The CBDT has asked all its offices in the country to monitor and keep in touch with all the banks and other service sectors in their assessment zones for compliance of the above orders.
The budgeted target under the direct tax category is fixed at Rs 7.36 lakh crore for the current fiscal and as per the CBDT it has collected Rs 5,53,373 crore till March first week as gross collections.
In order to ensure better TDS and Advance Tax collections, the sources said, I-T officials have been asked to make on-spot visits to defaulting organisations and also interact with officials and individuals responsible under the established official mechanism in this regard.
"The contribution of TDS to the overall gross direct taxes collections during 2013-14 fiscal was Rs 2,71,069 crore. This is a 17.88 per cent growth over the collections shown under this head from Rs 2,29,943 crore during 2012-13.
Thus, the TDS category contributes over 37 per cent to the gross direct taxes collections, emphasising its ever growing importance," a vision statement of the I-T department has said.
The department is also facing a big challenge to collect better more and more revenue because of the issuance of large amounts of refunds.