Taxman on the prowl in MP

Corporate houses, public sector banks and various state and Central government organisations in Madhya Pradesh had better watch out. Income-Tax authorities may knock at their door to check if all tax liabilities have been dispensed with.

Buoyed by the tremendous recovery record, the I-T department is about to launch an extensive drive to check TDS (Tax Deducted at Source) collection by various corporate houses, state and central government organisations, private hospitals and banks among others.

The I-T department, Bhopal circle has shown an impressive growth of 141 per cent in collections over last year and is readying to come down hard on defaulters. Against collection of Rs 116 crore as on August 2004, the Bhopal circle has already recovered Rs 280 crore as on August 31, 2005.

Sources said that TDS surveys of People's Group, State Bank of Indore, Regional Passport Office, Procter and Gamble, Rewa Municipal Corporation, International Public School, etc are already complete and have also verified the defaulters.

What is surprising is that awareness of TDS regulation among multinational companies, public sector banks, state and Central government organisations is low.

"When our officials surveyed a multinational company along with some government officers, they were surprised to find that these organisations, despite having a band of advisors and Income Tax consultants, failed to deduct and deposit TDS," said Income-Tax chief commissioner A K Luthra.

Luthra said that surveys have, historically, served the I-T department well, as they improve knowledge among organisations about rules and regulations regarding TDS. The department is monitoring the collections under this head and the TDS surveys conducted at various places have shown that employees and organisations are not conversant with the provisions of TDS.

He revealed that the default for non-deduction of tax at source is the responsibility of the Drawing and Disbursing Officers and organisations failing to deposit tax after deducting the same could face prosecution.