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Hospitals, Non-Government Organisations (NGOs), land acquisition and foreign remittances are some areas that the taxman may scrutinize closely for better revenue mobilisation via the Tax Deducted at Source (TDS) route.
This strategy was part of the agenda for the two-day annual conference of Chief Commissioners and Director General of Income Tax inaugurated by the Finance Minister on Monday. The meeting aims to formulate strategy not just for achieving direct tax targets but also to improve tax administration.
A senior official told Business Line , “Various ways are being discussed to augment revenue. An important one is the strategy for increasing revenue through TDS.” The Finance Ministry has set a target of 5.70 lakh crore for direct tax collection during 2012-13.
He said that TDS on foreign remittances (money sent to foreign companies or individuals), is a major issue. The amount remitted without TDS is increasing each year and they are being made on the basis of a certificate issued by a Chartered Accountant. So, the suggestion here is that these huge sums need to be properly checked, he added.
Outflows
This was spurred by doubts over the actual outflows during July 1, 2009 to May 15, 2012 on account of import of goods and services. The amount was shown as $268.21 billion, “which appears to be less compared to the total imports,” the official said.
The proposed strategy for TDS also notes that hospitals are making huge payments to doctors, particularly surgeons, without TDS. Similarly, it was also advised that those NGOs making huge payments, which attract TDS provisions, need to be checked.
This proposal has listed land acquisition as another area which has huge revenue potential.
Such matters are covered under section 194LA of the Income Tax Act. This section says that compensation of over Rs 2 lakh under compulsory acquisition of any immovable property (other than agricultural land) needs to be paid after TDS at the rate of 10 per cent.
It has also been said that Comptroller and Auditor General (C&AG) publishes annual reports of all State Governments, public sector undertakings, etc.
It was suggested that proper analysis might help in verifying whether the concerned departments of State Governments or PSUs were making proper TDS or Tax Collected at Source (TCS) payments.
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