Assessments Under Section 201 – A Nightmare Awaiting Manifestation

This article has been published by TaxSutra at Assessments Under Section 201 – A Nightmare Awaiting Manifestation | Taxsutra.

The Tax Deducted at Source ("TDS") mechanism is one of the most preferred methods of revenue collection among countries across the world.¹ This is because, the emphasis of TDS is to increase the tax base to create a culture of compliance and to lessen tax evasion². Simply put, the TDS mechanism imposes upon the person making a payment, an obligation to withhold tax at the time of such payment. It is further the responsibility of the remitter to deposit such TDS with the government. Failure to do so invites penalty under section 271C of the Income-tax Act,1961 ("Act") and prosecution under section 276B of the Act.