Income Tax Notice: The old ‘weapon’ of the Income Tax Department, Section 133C has now become active. Under this, notices have been given to Mumbai, Delhi and other big companies in the beginning of December.
Be careful while declaring house rent allowance, health insurance, expenditure on home loan, tax saving investments under 80C etc. Any discrepancy between the TDS calculation and the employee’s claim can come to the notice of the tax authorities. Because, the old ‘weapon’ of the Income Tax Department, Section 133C has now become active. Under this, notices have been given to Mumbai, Delhi and other big companies in the beginning of December.
What is section 133C?
Section 133C empowers tax officials to ask for information to verify details. People familiar with the process told ET that companies are being asked to either ‘confirm the information’ or ‘submit a correction statement’. The Income Tax Department aims to track cases where either the company has deducted less TDS than expected or employees are claiming refunds through additional investment declarations which were not disclosed earlier but later during the year. ITR was included while finalizing it.
Section 133C has been used very little so far
“Section 133C, introduced in 2014-15, has been little used so far, but recently many companies have received notices under this section,” said Rahul Garg, managing partner, Aesir Consulting. According to Garg, it is important that only genuine cases are taken up for investigation at the company or employee level.
He said, “This can help in a more vigilant approach towards tax compliance through proper verification at the employer level i.e. TDS deductors, correct claims by taxpayers, increased tax collection and fair choice of old and new tax regimes.
Responsibility of companies: Calculate TDS correctly: Garg said, “The law puts the onus on the employer to correctly calculate the TDS of the persons employed by him and report it every quarter, but traditionally companies The focus has not been on closely verifying the declarations by the employees. In some cases the employees do not submit the actual documents on time. Moreover, there are many software companies to which the companies usually outsource the payroll job.”
What happens if employees make fake claims
Rajesh P Shah, partner at CA firm Jayantilal Thakkar & Co, said the difference would not be easily visible in the tax office system if employees make fake claims and the companies supporting them, but any difference between the two sets of information would be noticed immediately. Will go. However, if a case is taken up by the tax office then there is a strong possibility that it will check the records of all the employees.
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