IT Dept unearths TDS Scam involving 3200 Crores: Mumbai based Companies and Individuals under Scanner

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The income tax department has unearthed a Rs 3,200 crore scam where 447 companies deducted tax from its employees but did not deposit with the government and diverted to further their business interests. In relation with this, proceedings have been initiated by the TDS wing of the income tax department against some entities and individuals in Mumbai. Warrant has been issued in some cases.
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Reportedly, according to an investigation between April 2017 and March 2018, 447 companies deducted tax from its employees but did not deposit the amount and diverted it to further their own business interests.
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As per the Income Tax Act, such offences would attract a minimum punishment of three months to a maximum of seven years of rigorous imprisonment plus fine. Prosecution is initiated under Section 276-B.
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However, sources in the I-T Deparment claims, “It is not a scam — but a very common verification survey details. Every year, its done. Quantum may vary from year to year. This is just like an employer deducts TDS on salary but does not deposit on time.”
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I-T has initiated recovery actions by attaching bank accounts besides movable and immovable assets, a source said. “In several of the cases, they diverted the money towards working capital. Some apologised and promised to pay while some said they could not pay because of adverse market conditions.
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In some cases, of the amount collected from the employees, 50% was deposited with the government and the balance misused by the employer,’’ an official explained.