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Income Tax Notice: The Income Tax Department is continuously monitoring taxpayers. Now, the department has initiated a campaign for irregularities related to TDS and TCS. Unlike before, the department intends to target people and companies who, after deducting the required TDS and TCS, did not deposit them with the government. As per the department’s officials, there is enquiry going on for approximately 40,000 of such taxpayers. Their tax deduction claim for financial year 2022-23 and 2023-24 is being investigated. People from these taxpayer’s are being served notices from the department.

A 16 point plan was prepared

The Central Board of Direct Taxes (CBDT) developed a 16 point strategy to complex fraud perpetration, specifically with TDS. In addition to this, the data analytics team has made a list of potential fraud committed TDS taxpayers out of which a few would be targeted for investigation. In an interview with ET, one senior official stated that the department has complete data available. These taxpayers are the first to be contacted with information so that there is an opportunity to pay the tax instead of rigorously imposing tax lastly.

What type of cases will be on the watch list?

As per the authorities, their focus of investigation will be on those groups or individuals who are persistently non-compliant with TDS payments. Also under scrutiny are those who seem to have an unusually large gap between tax deductions and advance tax credit. They are also suspicious of companies that have been shuffling around with their names. Companies owning loss making units are also under scrutiny.

Penalty on Non-Compliance of TDS

Section 40(a)(ia) of Income Tax Act imposes penalty where TDS was claimed but not remitted to the State. Officers are being told about such taxpayers who have claimed the entitlement of certain exempted income and have been keeping a lot of money 'out of the tax net'. Similarly, the department is going to scan all those cases where there is an increased filing of revised TDS returns and any putative default flag has been lowered.

Tracking tax fraud with data analysis

Police have been directed to make sure that all complaints are properly investigated and that tax offenders are tracked using data mining techniques. The Income Tax Department will guarantee that taxpayers do not have to endure any hardships. However, serious fraud will never be tolerated.


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