State Government Becomes a Big IT defaulter – Owes Rs.5,000 Crore to the Department

15th Apr,2012: It’s really shocking to hear that the state government has turned into a big income tax defaulter. According to sources from the department, the state owes as much as Rs.5000 crore to the Income Tax Department for the financial year 2011-12. Surprisingly maximum amount is related to the tax deducted at source (TDS) from the employees’ salaries.

In general, though there is a delay of a couple of months, the state government pays income tax by making book adjustments through AG account. But, this time, the government could not pay. While PSUs like NMDC, SSCL, Andhra Bank, SBH and Rashtriya Ispat Nigam Ltd. stood as top five IT payers, the state paid nothing to the IT department.

An official from the IT department stated that state government is not exempted from penalty on delayed tax payment and hence it now needs to pay the tax along with penalty.

As the state government deducts the tax before making salary payments to employees, brokerage and under various other heads, it also should deduct TDS of one or two percent on the value of various civil works like construction of drains, canals etc. and must deposit the TDS amount with the IT department.

source: IBNLive