The income tax department on Monday asked the organisers of some of Calcutta’s lavish Durga pujas to follow the system of tax deduction at source (TDS) whenever they make payments in excess of Rs 30,000.
The organising committees are required to apply for TAN (Tax Deduction and Collection Account Number) for TDS payments ahead of the next Durga Puja. Some organisers have been told to follow TDS norms while clearing their dues for last year’s celebration.
This is the first instance of the income tax department trying to ensure tax compliance by puja organisers. The budgets of some pujas run into crores of rupees, although the actual figures are seldom in the public domain. Only a handful of organising committees file TDS returns.
Representatives of around 20 puja committees had turned up at the income tax department’s office on Middleton Row to answer queries by a team of officials led by income tax commissioner J.V.D. Langstieh. They were asked about their sources of money, how they make payments and whether they pay taxes. The committees were asked to show receipts issued against payments made till date and disclose the quantum of dues still to be cleared.
The income tax team met representatives of each of the puja committees separately, sources said.
“The officials made it clear that from 2019, TDS is mandatory for all large payments. They said that whatever system we have followed so far is okay, but not anymore,” Kajal Sarkar of the Bosepukur Sitala Mandir Puja Committee said.
Notices have been issued to 20 other puja committees.
A section of income tax officials said their interactions with puja organisers revealed that payments to contractors or professionals hired for any work are usually never brought under TDS. “There is no mechanism to find out how much some of these puja committees earned and what was their exact expenditure,” an official said.
Puja committees make large payments to artists, artisans, decorators and suppliers of electrical equipment. None of these transactions is through TAN, a 10-digit alphanumeric number that commercial organisations use to deduct tax at source. “Since puja committees have income and expenditure running into large amounts, they need to apply for TAN,” an official said. “Usually, individuals don’t need this unless it is a case of proprietorship.”
Section 203A of the Income Tax Act requires this category of organisations or individuals to quote the TAN allotted by the income tax department on all TDS returns.