Beware. The taxman is watching you!
Companies with a wide range of outsourcing services would come under tighter scrutiny now. For instance, a company that outsources its transport services to another company, could well be asked to provide relevant details such as receipts and bills to ensure that appropriate tax has been deducted at source.
The department wants to ensure that there is no discrepancy in TDS (tax deducted at source) collection.
“The income tax department would find it difficult in adhering to the steep growth target set for this financial year with the drop in the GDP (gross domestic production) projection. However, all efforts are on to achieve the target and we are hopeful as the second half is yet to come,” said an official source who did not wish to be identified.
The source added that the income tax department would increase its vigilance even for TDS because often companies do not comply with the required norms leading to lower collection.
With the GDP growth forecast for the country dropping and the rupee slipping, the government is likely to face a stiff challenge in achieving the 18% growth target in indirect tax collection for the current financial year as projected by finance minister P Chidambaram in the Union budget for 2013-14.
The Union government hopes to generate Rs. 4,700 crore from indirect taxes alone this financial year.
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