As
you are aware, most Individual Taxpayers, particularly various
Professionals, maintain their books of account on Cash Basis and
accordingly account for professional fees received on cash basis.
Accordingly,
while filing the Return of Income, credit for TDS deducted by the
payers u/s 194J is claimed in the year in which the relevant
professional income is accounted/ received and offered for tax on
receipt basis, in accordance with the provisions of section 199 of the
Income-tax Act, 1961 which provides that “Any Deduction made in
accordance with provisions of section 192………. 194J ………. and paid to the
Central Government, shall be treated as payment of tax on behalf of the
person from whose income the deduction was made …. and credit shall be
given to him for the amount so deducted, on the production of the
Certificate furnished u/s. 203 in the assessment made under this Act for
the assessment year for which such income is assessable”.
Thus,
whereas the Payers deduct TDS in Year 1 on accrual basis, particularly
various types of Professional fees at the end of the Financial Year as
on 31st March, the Recipient Professionals claim credit for the TDS in
Year 2, upon actual receipt, resulting in TDS Credit mismatch.
Prior
to AY 2014-15, there was no proper disclosure mechanism in the Returns
of Income filed by the Individual Professional Tax Payers for AY 2012-13
and AY 2013- 14 and earlier years. The CPC Bangalore does not give
credit/ has not given credit for TDS in such cases i.e. TDS deducted in
Year 1 but credit whereof is claimed in Year 2, resulting in huge demand
for tax and interest and causing huge mental agony and anxiety to the
taxpayers.
There is no clear, effective and speedy redressal
mechanism in such cases and one has to run from Pillar to Post upon
receipt of Intimation u/s 143(1), reflecting a huge demand on account of
such Tax Credit mismatch.
Through the medium of BCAS’s
prestigious Journal, I wish to highlight this issue faced by thousands
of Individual Professionals, to the attention of High Revenue Officials
in CBDT and CPC Bangalore, requesting them to issue clear guidelines and
establish speedy and effective remedial mechanism.
Regards,
Tarun Singhal
The Editor
Bombay Chartered Accountant Journal
Sir,
Apropos
your editorial captioned “A GOOD BEGINNING” [April 2015 issue] wherein
you have made very important observation about black money lying within
the country and which reads as ” If income or assets on which tax has
been evaded lie within the country, normally they circulate through
distribution channels albeit unofficial…………. must be grossly
unequal. Consequently, to an extent, such moneys gives a fillip to economic activity.”
I fully endorse your view . Black money does play positive role in the
economy.To my mind it is not tax evaders but tax “predators” who cause
immense damage to the economy. Tax predators are those who eat away
taxes paid by taxpayers.They squander taxes in the name of cost of
governance, development and helping poorest of poor. Mindless use of
taxes is as dangerous as tax evasion. Any government be it Congress or
BJP, is interested in finding ways and means for collecting more and
more taxes, [knowing fully well] that this adds to inflationary
conditions in the economy. I am sorry to say, any new legislation
enacted, whatever be its noble objectives, means a new area/era of
litigation, even if it begins well.
Regards
Avinash Rajopadhye
Chartered Accountant
