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If TDS is not deposited in time, employees cannot claim tax credit at the time for filing their return (iStock)
If TDS is not deposited in time, employees cannot claim tax credit at the time for filing their return (iStock)

CBDT says notices sent only where TDS was not deposited by employer

  • Only 1,400 prosecutions filed so far for various offences in 2018-19
  • A number of these pertained to cases where TDS was deducted but not deposited with the government

New Delhi: Allaying fears that it had sent notices en masse to people, even for minor defaults, the Central Board of Direct Taxes today said no such action had been taken and that only 1,400 prosecutions had been filed so far for various offences during the ongoing financial year. Most of these pertained to cases where the tax had been deducted at source (TDS) and the same had not been deposited with the government.

The clarification comes after media reports said the CBDT had sent notices to a large number of people, including where the offence was minor. 

A press release said the CBDT had clarified that Mumbai Income Tax TDS office had issued prosecution show-cause notices “only in a limited number of big cases where more than 500,000 of tax was collected as TDS from employees" and yet the same was not deposited with the income tax department in time.

If TDS is not deposited in time, employees cannot claim tax credit at the time for filing their return. Deducting tax from employees and not depositing it in time is an offence punishable under the law.

The CBDT said last month, only in 50 big cases prosecution notices were issued by the Mumbai IT office. Out of these, in 80% of the cases, the TDS default is above 1,000,000 and in 10% of the matters, the default is between 500,000 and 1,000,000. In the remaining cases, the TDS default is of more than 1 crore.

Prosecutions have also recently been launched against four big business houses where more than 50 crore of tax was collected by them from taxpayers and yet not deposited with the government in time.

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