Types of payments. - Income Tax - 1292/CBDT

INSTRUCTION NO. 1292/CBDT Dated : December 10, 1979 Section(s) Referred: 192 ,193 ,194 ,195 ,80E(2) Statute: Income - Tax Act, 1961 Tax deduction at source has developed into a major source of revenue collections. It now covers the following types of payments:- (i) Payments for securing retirement annuities (Sec.80E(9)). (ii) Salaries (Section 192). (iii) Interest on securities. (Sec. 193) (iv) Dividends (Sec. 194). (v) Interest other than interest on securities (Sec. 194-A) (vi) Winnings from lottery or cross-word puzzle (Sec. 194-B). (vii) Winnings from horse race (Sec. 194-BB). (viii) Payments to contractors and sub-contractors (Sec. 194-C) (ix) Insurance Commission (Sec.194-D). (x) Sums payable to non-residents (Sec. 195). 2. It contributed 20% (Rs.487 crores out of Rs.2,424 crores, of the total collections of Income-tax and Corporation-tax during the year 1978-79. 3. Several steps have been taken from time to time to streamline the Administration of provisions relating to TDS. Vide (late) Shri R.S. Chadda's D.O. F.No. 11013/36/74. Ad. VII, dated 7th June 1975, the following posts of the Income-tax officers and complementary staff were sanctioned to deal, exclusively with the work relating to TDS. 4. The above 27 Income-tax Officers were to be designated as ITOs Salary Circle and were required to exercise jurisdiction for all matters relating to TDS from salaries. They were also required to check annual salary returns, effect recovery of short payments and /or short deductions of TDS and process cases relating to TDS defaults for prosecution. The Commissioners were also required to utilise, on administrative basis, the services of these officers, wherever feasible, to check returns and statements relating to TDS from payments other than salaries. 5 Reports received from the Commissioners of Income-tax show that TDS Cells have been very well organised in some charges. In one major multi-Commissioner's charge, the TDS Cell consists of 5 ITOs, 2 UDCs, 2LDCs and one Stenographer and is under the control of an IAC. In one year alone the collection of TDS has more than doubled in that charge. In another Commissioner's charge there is one TDS Cell for salaries and the 2nd Cell to deal with TDS work under sections 194A, 194B, 194BB, 194C and 194D. The latter Cell performs primarily certain non-statutory functions like maintenance of registers of persons liable to deduct tax at source, Daily Collection Register, sending statistical reports relating to TDS, liasion with outside agencies for discovering new deductors and bringing cases of defaults to the notice of the ITOs having jurisdiction over the persons responsible for making the payment for necessary penal action. 6. It is hoped that in all the charges mentioned in para.2 above, separate ITOs sanctioned for TDS work are actually in position and are doing work exclusively relating to TDS. In other charges, it is hoped, TDS work has been assigned to one or more ITOs at different places. 7. In 8 metropolitan cities viz. Bombay, Calcutta, Delhi, Madras, Ahmedabad, Bangalore, Hyderabad and Kanpur the annual salary returns were proposed to be checked with the help of the computers. Now this work has to be done manually. As there may be some backlog of work, Board has decided that in these 8 cities, the work of checking of entries in the annual salary returns may be done on a sample basis - the percentage being selected by the IAC in consultation with the concerned ITO(TDS) in such a way that the backlog is cleared by 30th April, 1980 when annual salary returns for the current financial year would start coming. 8. Board would like to know the manner in which TDS work has been organised in your charges and the number of ITOs and other staff exclusively deployed for TDS work. The improvement in collection of TDS during the last 2 years may also be indicated together with the expected collections during the current year. 9. Your report in the matter may kindly be sent to the Board by 31st January, 1980.