Company Director sent to jail for Rs. 50L TDS default
What's the story
A Delhi court has sentenced the Director of a real estate firm to six months' rigorous imprisonment for allegedly failing to deposit over Rs. 50L TDS (tax deducted at source) in time to Income Tax Department. "The company and its Director have been asked to pay a fine of Rs. 1L each...the Director has been sentenced to RI of six months," an official said.
Charges
Company, Director have been charged under sections of IT Act
The official said Director of the firm, engaged in building construction services, has been convicted recently by the court as his firm "committed default in timely deposit of Tax Deducted at Source (TDS) of Rs. 50,61, 876". The man and the company have been charged under IT Act's Sections 276B (failure to deduct and pay tax) along with Section 278B (offenses by companies).
Information
What was the court's observation?
The court, the official said, observed that the offense under Section 276B is "complete" when TDS isn't deposited on time and a company cannot be allowed to take unfair advantage and use the tax amount so deducted for any other purposes.
TDS defaulters
IT Department has stepped up enforcement action against TDS defaulters
The Income Tax Department has, in the recent past, stepped up enforcement and prosecution action against TDS default cases as this category of revenue contributes to over 43% of the total direct taxes collection. "In Delhi, the TDS wing of the department has launched more than 150 prosecution proceedings against defaulters during the April-July period," Principal Chief Commissioner SS Rathore said.
Rules
What are the rules related to TDS?
As per rules, the TDS has to be paid to the credit of the central government (IT Department) within seven days from the end of the month in which the deduction is made. The Section 278B of the IT law allows for an imprisonment of the defaulter or the nominated TDS deducting officer for a maximum of 7 years.