Concerned over latest shortfall in TDS (tax deducted at source) revenue collections, the income tax department has decided to enhance prosecution action against large defaulters with the help of its specialised electronic database and processing centre created for this exclusive task.

The department’s central processing centre-tax deducted at source (CPC-TDS) based in Ghaziabad in Uttar Pradesh has been instructed to inform and timely update the taxman about defaulters under this category, which is witnessing a 50% slump in growth this time as compared to the last financial year.

While according to the standard operating procedures, any default of delayed TDS payment above `1 lakh is mandatorily taken up for prosecution, the said data centre has been re-instructed by CBDT (apex policy-making body of the I-T department) to generate a list of non-filers of TDS statement within one month of the due date and communicate it to the assessing officer (TDS) with a copy to the I-T commissioner of TDS.

“CBDT has now asked CPC and the I-T department to scrupulously adhere to these guidelines and even prepare an advance plan for checking default in this regard as TDS is an important category of taxes under the overall direct tax kitty of the central government. A slow growth rate has been seen in this category recently but things will shore up,” a senior I-T officer said.

CPC-TDS provides comprehensive data on compliance behaviour of the deductors, defaults details, PAN errors, besides helping the deductor or the department to identity and rectify mistakes in this domain.

TDS is deducted and collected from categories like salaries, immovable property, rent and few other heads. “The strategy to augment revenue through TDS has to be a mix of enforcement, capacity building and leveraging of information that is now available with the department through CPC (TDS),” the officer said.

According to latest data, the growth in TDS collections is less by 50% this time as compared to the last period. In the 2013-14 financial year, the growth under this head was 16.73% while in the current fiscal of 2014-15 the growth percentage is just 7.84%.