The Central Board of Direct Taxes (CBDT) has allowed the tax authorities to share the information of taxpayers with scheduled commercial banks. This decision will make it easier for banks to decide which customer they have to deduct TDS (Tax deducted at source) and whose not. The government’s move is aimed at curbing tax evasion and increasing the tax base in the country. In a notification issued on August 31, the board has included Scheduled Commercial Banks under Section 138 of the Income Tax Act to share information of taxpayers.
Section 138 of the Income Tax Act gives income tax authorities the right to share information or details of taxpayers with other agencies. The board said in the notification that in line with sub-clause (ii) of clause (a) of sub-section (1) of section 138 of the Income Tax Act, 1961, the Central Government specifies Scheduled Commercial Banks for the purpose of the respective clauses. These banks are those listed in the Second Schedule of the Reserve Bank of India Act 1934.
Many administrative problems will be overcome
Nangia Andersen LLP partner Sandeep Jhunjhunwala says that these banks have been included in the list of organizations with whom tax authorities can share information related to taxpayers. With this, many kinds of administrative problems that are presently facing the banking industry of the country will be resolved. With the inclusion of these banks in Section 138 of the Income Tax Act, the scheduled commercial banks will be able to decide on TDS deduction in case of their customers on different types of payments.
He said that this step will help especially in cases like TDS under section 194N, which require various types of income tax information and declarations from the customer who withdraws. It also said that the sharing of information by the tax department will enable banks to validate the forms 15G and 15H submitted by customers, banks will be able to match the details with the tax returns of old years.
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Exchange of information with other agencies as well
Exchange of information between Income Tax authorities and SEBI, Central Board of Indirect Taxes and Customs, MSME Ministry, Narcotics Control Bureau, Intelligence Bureau, Central Investigation Agency, Central Secretariat, Ministry of Agriculture, etc., recently regarding Section 138 of Income Tax Act Similar notifications and MoUs have been issued for.
Source: www.financialexpress.com
