TaxTonic Session: Prosecution for Withholding Tax Default – Changing Dynamics!

Episode Duration:
90 minutes

Episode Background:
'TaxTonic', a 'subscriber only' thought leadership series, is Taxsutra's endeavour to consistently deliver top notch technical content to it's readers. The labyrinth of tax rulings on convoluted transactions keeps the world of taxation unpredictable and ever-evolving. This series will feature engrossing presentations, incisive analyses and a deep-dive by the tax experts on burning issues & controversies. So, gear up for a 'tonic' to chisel your tax mind and challenge your wit.

Speakers:
- Mr. Tushar Hemani (Senior Advocate)

Moderator:
Mr. Sachin Sastakar (Chartered Accountant)

What shall the episode cover?

The Indian Exchequer collects over 50% of total direct tax through the Tax Deduction at Source (TDS). TDS machinery not only acts as a collection agent but also serves as a regime for timely reporting of transactions by the taxpayers. Looking at the changing dynamics and expectations from the Government, new sections have been added in recent times including the provisions proposed by the Finance Bill, 2023. Apart from disallowance of the expenditure, TDS related defaults can either result in levy of penalty or initiation of prosecution. With a simple threshold which was applied hitherto, newer sections like 194Q, 194N, 194R and 194S pose significant challenges for the payer to identify the correct amount on which tax is required to be deducted and deposited. Therefore, the challenges for the deductors have increased multifold in recent times because of the expansion in scope of TDS and complexities of the transactions which is amplified by the increasing trend of prosecution under Section 276B of the Income-tax Act, 1961.

Taxsutra presents the next episode of TaxTonic to analyse and understand the evolving dynamics of TDS prosecution. This episode is primarily focused on:
1. Understanding complexities in compliance of TDS provisions introduced in the recent times.
2. Defenses available to the deductor against prosecution proceedings.
3. Punishment for TDS defaults by the companies.
4. Guidelines for Compounding of Offences on TDS default.
5. Recent judicial view on TDS prosecution.