The Income Tax Department has initiated a large-scale investigation into irregularities in Tax Deducted at Source (TDS), covering more than 40,000 taxpayers across the country. This campaign targets individuals and companies that have either failed to deduct TDS/TCS or have not deposited it with the government. Notices are being issued to those found violating the tax rules.
This action is based on TDS data from the financial years 2022-23 and 2023-24. The Central Board of Direct Taxes (CBDT) has detected multiple discrepancies in TDS payments and has devised a 16-point action plan to identify non-compliant taxpayers. In addition to this, the department’s data analytics team has compiled a list of taxpayers who have been flagged for further scrutiny. Officials involved in the investigation have confirmed that these taxpayers will be given an opportunity to rectify any mistakes in their tax payments before further action is taken.
Stricter Measures Against Repeated Violations
The Income Tax Department is preparing to take strict action against taxpayers who have repeatedly violated TDS regulations. The focus will be on cases where there is a significant difference between TDS deductions and advance tax payments. Additionally, companies that frequently change their TDS deduction details are also under investigation. Authorities have warned that repeated violations will result in stricter enforcement measures.
March 31 Deadline for TDS Corrections
Taxpayers who have experienced incorrect TDS deductions by banks or other financial institutions have until March 31 to make the necessary corrections. This deadline applies to those whose TDS details do not appear in Form 26AS or the Annual Information Report (AIS). They are advised to check their tax records and rectify any errors before the deadline to avoid penalties.
Six-Year Window for TDS Adjustments
The government has set a six-year time limit for corrections in TDS returns, ensuring that taxpayers have ample time to address any discrepancies. This period starts from the financial year for which the revised TDS return is being filed. For example, taxpayers who need to correct their TDS returns for the 2018-19 assessment year must do so before March 31 of the current financial year.
Taxpayers Must Request Corrections from Banks or Institutions
If a mistake has been made in a TDS return, it is the taxpayer’s responsibility to request the concerned bank or financial institution to correct the return. Without a properly filed TDS return, taxpayers will not be able to claim deductions. In addition, the government has released an updated version of Form-24Q and Part-B of Form-16 for the fourth quarter of the 2024-25 financial year on the TRACE portal, ensuring smoother compliance for employers and taxpayers.
