Income Tax Authorities Can Share Info with Scheduled Commercial Banks: CBDT
The CBDT has said the income tax authorities can share information with scheduled commercial banks, a move that would ease the lenders’ hassle of deciding TDS deductibility on various payments to their customers. In a notification dated August 31, the Central Board of Direct Taxes (CBDT) included ‘scheduled commercial banks’, listed in the second schedule of the Reserve Bank of India Act, 1934, under Section 138 of Income Tax Act for sharing of information.
CBDT is the apex tax body on personal income tax and corporate tax. Section 138 of the Income Tax Act empowers income tax authorities to share information/ details of its taxpayers with other agencies.
Nangia Andersen LLP Partner Sandeep Jhunjhunwala said the addition of these banks in the list of bodies with which the tax authorities can share information received from the taxpayers should ease a lot of administrative hassles currently faced by the banking industry in the country. “This addition to Section 138 of Income Tax Act would surely ease the burden of scheduled commercial banks for deciding TDS deductibility on various payments to its customers,” he said. The move will especially help in cases such as TDS under Section 194N, which requires multiple income tax related information and declaration from customers making withdrawal, Jhunjhunwala added.
He also said the sharing of information by the tax department would also enable banks to validate Forms 15G and 15H submitted by the customers, matching the details with tax return of earlier years..