Massive Incorrect TDS Filings Crackdown: Income Tax Dept to Audit 40,000 Taxpayers
The Income Tax Department has launched a nationwide crackdown on 40,000 taxpayers for incorrect TDS filings, intensifying scrutiny to ensure compliance and enhance the tax base
The Income Tax Department is gearing up for a nationwide crackdown on individuals and businesses that have failed to properly deduct and deposit taxes collected at source (TDS/TCS). This move is expected to impact around 40,000 taxpayers who have come under scrutiny based on tax deductions made in the financial years 2022-2023 and 2023-2024. YearTDS (in ₹ crore)Net Tax (in ₹ crore)%...
The Income Tax Department is gearing up for a nationwide crackdown on individuals and businesses that have failed to properly deduct and deposit taxes collected at source (TDS/TCS). This move is expected to impact around 40,000 taxpayers who have come under scrutiny based on tax deductions made in the financial years 2022-2023 and 2023-2024.
| Year | TDS (in ₹ crore) | Net Tax (in ₹ crore) | % of Net Tax |
| 2019-20 | 4,80,383 | 10,50,681 | 45.7 |
| 2020-21 | 4,70,276 | 9,47,176 | 49.7 |
| 2021-22 | 6,34,243 | 14,12,422 | 44.9 |
| 2022-23 | 8,17,970 | 16,63,686 | 49.2 |
| 2023-24 | 6,51,922 | 19,60,166 | 33.3 |
The Central Board of Direct Taxes (CBDT) has introduced a comprehensive 16-point plan to identify TDS defaulters. Leveraging advanced data analytics, the department has compiled an exhaustive list of taxpayers who are now in the crosshairs of this intensified scrutiny.
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The focus will primarily be on repeat offenders and cases exhibiting significant discrepancies in tax deductions. The department will also scrutinize companies using units with negative profit margins or engaging in questionable audit practices.
Assessing officers have been directed to report instances with substantial disallowance under Section 40(a)(ia) of the Income Tax Act, which pertains to non-deduction or non-deposit of TDS.
Tax authorities will closely monitor TDS returns that have been revised multiple times with significant reductions in the default amount. Grievances filed by deductees and patterns in TDS payments will be analyzed using data analytics to identify anomalies.
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In line with the government’s carrot-and-stick approach, the Centre has announced the rationalization of TDS and TCS rates in this year’s budget. This includes reducing the number of rates and lowering thresholds above which TDS is deducted, aimed at easing compliance for honest taxpayers while taking strict action against willful defaulters.
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