I-T unearths over Rs 3,500-crore TDS default by oil, telecom firm in Delhi

New Delhi: The Income Tax Department has detected TDS default of more than Rs 3,500 crore after it surveyed a major oil company and a telecom operator in the national capital, the CBDT said on Wednesday.

It called these instances a "major breakthrough".

In the case of the oil firm, the CBDT said that Tax Deducted at Source (TDS) default of about Rs 3,200 crore was detected.

"The defaults included short deduction of tax and non-deduction of tax, respectively. Short deduction of tax pertained to TDS under section 194J (of the I-T Act) for several years on payment of fee for technical services for installation and maintenance of high-tech oil refineries, payments for chemical process of re-gasification and transportation of LNG," it said.

"Default of non-deduction was detected on composite contracts involving service and purchase of products on which TDS at the rate of 2

per cent should have been deducted, but which was not deducted resulting in the said default," the CBDT said in a statement.

In the case of the telecom firm, the TDS default amounts to Rs 324 crore.

"The company did not make the required TDS of 10 per cent under section 194J of the I-T Act on technical contracts worth Rs 4,000 crore. The amount is further liable to go up once the enquiry is completed," it said.

The Central Board of Direct Taxes (CBDT), which frames policy for the tax department, did not name the entities involved.

In a similar action, the department found several hospitals in Delhi were "openly flouting" norms of TDS and Tax Collected at Source (TCS) and were paying less tax to the department.