The income-tax department in Mumbai has started prosecution proceedings against 700 entities for non-payment of tax deducted at source, or TDS, in fiscal 2013. The department has found that at least 2,000 entities defaulted on TDS payments in the year ended March.

The total TDS collection for the Mumbai region rose 10% to Rs.63,000 crore from the previous fiscal, said V.K. Pandey, commissioner of income-tax (TDS) in Mumbai. He was speaking at a seminar on TDS organized by the Indian Merchants Chamber in Mumbai.

“We have been asked to launch prosecution in cases where the default is more than Rs.1 lakh and the delay is more than a year,” Pandey said.

The total TDS collection in the last fiscal was 4-5% lower than the department estimates as companies fired employees or transferred them to other locations where they paid lower rent, Pandey said.