Defects in e-filed TDS returns delay I-T credits, refunds

The income tax department has identified that defects in the electronically filed TDS (tax deducted at source)

returns by companies for the financial year 2005-06 have caused delays in giving credit for the tax paid to taxpayers.

At a seminar organised by the Jamshedpur circle of the income tax department here Friday to make TDS deductors aware of their responsibilities in discharging duties in a proper and correct manner, the Jamshedpur income tax commissioner said 2,500 out of 3,100 corporate assessees committed mistakes in the returns filed by them.

According to him, verification of the electronically-filed TDS returns, which were filed by corporates from June 1, 2006 could not take place ‘in a proper manner’ anywhere in the country particularly owing to shortage of manpower in the department.

Mistakes committed by TDS deductors while filing their returns electronically, that otherwise would have a wide ramification in giving tax credit to the individual tax payer, could not be brought to the notice of deductors in time, and the mistake persisted for a considerable period of time, he said.

“The gravity of the mistake came to the notice for the first time when the electronically filed returns were sorted out, and it was noticed that deductees were not getting tax credit mainly because of mistakes committed (in filing returns) by tax deductors,” the income tax commissioner said.

In order to take immediate corrective action in this regard to ensure that taxpayers did not face difficulty in filing returns electronically in the future, income tax authorities have decided to apprise TDS deductors of the defects they committed.

The department has in the process taken the returns filed for the financial year 2005-06 as the basis and has identified the types of defects committed by TDS deductors.

The commissioner said the department has also decided that apart from approaching tax deductors individually to carry out the necessary corrections, the department would also give wide publicity to all TDS deductors so that mistakes were not committed in future.