Be careful while declaring house rent allowance, health insurance, expenditure on home loan, tax saving investment under 80C etc. Any discrepancy between the TDS calculation and the employee’s claim may come to the notice of the tax authorities. Because, Section 133C, the old ‘weapon’ of the Income Tax Department has now been activated. Under this, notices have been given to Mumbai, Delhi and other big companies in early December.
What is Section 133C?
Section 133C empowers tax authorities to seek information to verify details. People familiar with the process told ET that companies are asked to either ‘confirm the information’ or ‘submit a rectification 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 declared earlier but later in the year. ITR (ITR) was incorporated while finalizing it.
Section 133C has so far been used very little
“Section 133C, which was introduced in 2014-15, has been used sparingly so far, but recently many companies have received notices under the section,” said Rahul Garg, managing partner, Esir 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 of taxpayers, enhancement of tax collection and proper selection of old and new tax regimes.
Liability of Companies: Compute TDS correctly: Garg said, “The law places an onus on the employer to properly calculate the TDS of the persons employed by him and report it every quarter, but traditionally companies have focused on closely verifying the declarations made by the employees. But that didn’t happen. In some cases employees do not submit actual documents on time. Also, there are many software companies to which companies usually outsource payroll jobs.”
What happens if employees make fake claims?
Rajesh P Shah, partner at CA firm Jayantilal Thakkar & Company, said if employees make false claims and the companies supporting them, the tax office system will not easily see the difference, but any difference between the two sets of information will be noticed immediately. . will go However, if a case is taken up by the tax office, there is a strong possibility that it will examine the records of all employees.