SUMMER INTERNSHIP REPORT

ON
TAX DEDUCTED ON SOURCE UNDER INCOME TAX
ACT,1961
Submitted in partial fulfillment of requirement of Bachelor of
Business Administration (B.B.A) General

B.COM(H) 5th Semester

Batch 2013-2016
Submitted to:

Submitted by:

Mrs. Pallavi Ahuja

Professor

Arnav Tripathi
00814188813

JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL

KALKAJI

STUDENTS UNDERTAKING
I hereby certify that this is my original work and it has never been
submitted elsewhere.

PROJECT GUIDE:

STUDENT NAME:

Mrs. Pallavi Ahuja

Arnav Tripathi

Professor

00814188813

ACKNOWLEDGEMENT
2

The purpose of compilation of the subject for a project report always involves
creation of huge debt towards innumerable publications ,managers ,chartered
accountants and senior officers. I hereby put my sincere thanks to one and all.
A special thanks to Mr. M.K.Singhal (AGM, Taxation), for giving me an opportunity
to work as an intern in the esteemed organization.
This project would have been incomplete without the guidance of my mentor Mrs
Pallavi Ahuja with whom I have been closely associated.

ARNAV TRIPATHI
00814188813

CONTENTS
DESCRIPTION
ACKNOWLEDGEMENT
CONTENTS
LIST OF TABLES
LIST OF FIGURES
EXECUTIVE SUMMARY
INTRODUCTION TO TOPIC
OBJECTIVES
LITERATURE REVIEW
COMPANY PROFILE
RESEARCH METHODOLOGY
FINDINGS AND INFERENCES
LIMITATIONS
RECOMMENDATIONS
CONCLUSION
BIBLIOGRAPHY

PAGE NO.
3
4
5
5
7
8
40
41
46
61
62
68
69
70
71

LIST OF FIGURES
DESCRIPTION
Direct Taxes 1.2
Indirect Taxes 1.3
Deductees 1.5
Interest paid 1.6
TDS Deducted 1.7
4

PAGE NO.
9
10
65
66
67

LIST OF TABLES
DESCRIPTION
Management Team 2.1

PAGE NO.
49

CERTIFICATE OF COMPLETION
This is to certify that Arnav Tripathi, pursuing 5th semester of B.com (Hons) from
Jagannath International Management School, has completed his project on the topic
Tax Deducted at Source under Income Tax Act 1961. This project report is the work
carried out by him under my supervision and guidance.The work done by him is
appreciable and up to my satisfaction.
Project Guide
Mrs.Pallavi Ahuja
5

Assistant Professor
JIMS Kalkaji
New Delhi

EXECUTIVE SUMMARY
As a part of academic requirement, I Arnav Tripathi , having enrolment number
00814188813 a student of Jagannath International Management School, Kalkaji
affiliated to Guru Gobind Singh Indraprastha University, did my summer internship
with Tata Power Delhi Distribution Limited from 2nd July 2015 to 14th August 2015.
Tata Power Delhi Distribution Limited (TPDDL) is a joint venture between Tata
Power and the Government of NCT of Delhi with the majority stake being held by
Tata Power (51%). TPDDL distributes electricity in North & North West parts of
Delhi and serves a populace of 6 million. The company started operations on July 1,
2002 post the unbundling of the erstwhile Delhi Vidyut Board (DVB). With a
registered consumer base of 1.44 million and a peak load of around 1704 MW, the
company's operations span across an area of 510 sqkms.
6

I have done my internship in the Taxation group of Finance and Accounts (F&A)
department, under Mr. M. K. Singhal was my company mentor.

INTRODUCTION TO THE TOPIC

Tax regime in India has undergone elaborate reforms over the last couple of years in
order to enhance rationality, ensure simplicity and improve compliance. The tax
authorities constantly review the system in order to remain relevant. India has a
federal system of Government with clear demarcation of powers between the Central
Government and the State Governments. Like governance, the tax administration is
also based on principle of separation therefore well defined and demarcated between
Central and State Governments and local bodies.
The tax on local on local incomes, custom duties, central excise and service tax are
levied by the Central Government. The state government levies agricultural income
tax (income from plantations only), Value Added Tax (VAT)/ Sales Tax, Stamp Duty,
State Excise, Land Revenue, Luxury Tax and Tax on Professions. The local bodies
have the authority to levy tax on properties, octroi/entry tax and tax for utilities like
water supply, drainage etc.

Types of Taxes (Central)

7

Figure 1.1

DIRECT TAXES

These are the taxes that are levied on the income of individuals or
organizations. Income tax, corporate tax, wealth tax are some examples of
direct direction.

Income tax is the levied on income of individual , HUF and Firm etc.

Corporate tax is the tax paid by the companies.

Figure 1.2

Acts Abolished:

Estate Duty
Interest Tax
Gift Tax
Super Profit Tax
Wealth Tax

INDIRECT TAXES

These are the taxes borne by the consumers when they buy goods and
services. These include excise, customs duties, service tax and central
sales tax.

Customs duty is the charge levied when goods are imported into the
country , and is paid by the importer or exporter.

Excise duty is a levy paid by the manufacturer on item manufactured

within the country.

Figure 1.3

INCOME TAX
A. Assessment Year [Sec.2(9)]:- A year in which the income of the
previous year is to be assessed .In some countries it is known as Tax
Year. It always starts from April 1 and ends on March 31 of the next
year.
B. Previous Year[Sec.3]:- Income of the previous year is immediately
following the assessment year. In some countries it is called Income
Year.
C. Assessee[Sec.2(7)]:-Assessee means a person by whom income tax
or any other sum of money is payble under the act. It includes every
person in respect of whom any preceding under the act. It includes
10

every person in respect of whom any preceding under the act has been
taken for the assessment of his income or loss and the amount of the
refund due to him. It also includes a person a person who is assessable
in default under any provision of the Act.
D. Under section 2(31), person includes: An individual
A HUF family
A company
A firm
An association of persons or body of individuals
A local authority
Every artificial juridical person not falling within any of the
preceeding categories
These are the seven categories of persons chargeable to tax under the Act.

INCOME FROM SALARY

Income under heads of salary is defined as remuneration received by an individual for
services rendered by him to undertake a contract whether it is expressed or implied.
According to Income Tax Act there are following conditions where all such
remuneration are chargeable to income tax: When due from the former employer or present employer in the previous
year, whether paid or not.

When paid or allowed in the previous year, by or on behalf of a former

employer or present employer, though not due before it becomes due.

When arrears of salary is paid in the previous year by or on behalf of a former

employer or present employer, if not charged to taz in the period to which it
relates.

11

Incomes under the head of salary

Salary
Wages
Fees
Commissions
Pensions
Annuity
Perquisite
Gratuity
Annual Bonus
Income from provident fund
Allowance
Leave Encashment

Income from House Property

Section 22 provides for taxation of annual value of a property consisting of any
buildings or lands appurtenant thereto, of which the assessee is owner , under the head
Income from House Property. Tax imposed under section 22 is a tax on annual
value of house property and is not a tax on House Property . However, if a house
property is occupied by a taxpayer for the purpose of business or profession carried
on him by( the profits of which are chargeable to income tax), annual value of such
property is not chargeable to tax under the head Income from House Property.
The phrase lands appurtenant thereto has also been used. It needs to be clarified in
this context that income from letting of vacant plots of land when there is no
adjoining building will not be taxed under this head (will be taxed as income from
other sources).The existence of a building is therefore, an essential prerequisite.
Building will of course include residential houses (whether up for rent or self
occupied), office building, factory, godowns, flats etc as long as they are used for
business or profession by owner.

CONDTIONS NECESSARY FOR TAXING INCOME FROM

HOUSE PROPERTY:

The property should consist of any building or land appurtenant thereto

12

The assessee should be the owner of the property

The property should not be used by the owner for the purpose of any business
or profession carried on by him, the profits of which are chargeable to tax.

Unless all the aforesaid conditions are satisfied, the property income cannot be
charged tot ax under the head Income from House property

INCOME FROM BUSINESS AND PROFESSION

The following incomes are chargeable under the head Profits and gains of
business of profession The profits and gains of any business or profession which was carried
on by assess at any time during the previous year.

Any compensation or other payment due to or similar by any person

refereed to in section 28(ii)

Income derived by a trade, professional or similar association from

specific services performed for its members.

The value of any benefit or perquisite, whether convertible into money

or not, arising from the business or the exercise of a profession.

Any interest, salary, bonus ,commission or remuneration, by whatever

name called ,due to, or received by , a partner of a firm from such firm,
provided the same has been disallowed as deduction u/s 40(b) from the
income of the firm.
13

Any sum received under a keyman insurance policy including a sun

allocated by way of bonus on such policy.

Any sum, whether received or receivable, in cash or kind, on account

of any capital asset being demolished, destroyed, discarded or
transferred , if the whole of the expenditure on such capitalasset has
been allowed as a deduction under section 35AD

Business[Section 2(13)]:Includes any trade, commerce or manufacture or any adventure or concern in the
nature of the trade, commerce or manufacture.

Profession [Section2(36)]:Includes vocation .The word Profession implies the professional attainments in
special knowledge which is to be acquired only after patent study and application.

Income from Capital Gains

Any profit or gain from the sale or transfer of a capital asset is chargeable to
tax under the head Capital Gains. It is deemed to be the income of the
previous year in which the transfer of a capital asset takes place. Capital gain
arising from the transfer of immovable property is chargeable to tax in the
previous year, in which the effective transfer of title is conveyed and
registered.

Capital Asset:Capital Asset is defined to include property of any kind, whether fixed or
circulating, movable or immovable, tangible or intangible. Property includes
any rights in or in relation to an Indian company, including the rights of
management or control or any other rights whatsoever.

Types of Capital Gains:

Short Term- Gains on capital assets held for up to 36 months. For

shares it is up to 12 months.

Long Term-Gains on capital assets held for more than 36 months. For
shares it is more than 12 months.

Income from Other Sources

Other incomes which are not included in any other head of income, is to be
charged under the head Income from Other Sources
14

Winning from lotteries, crossword puzzles, races, card games etc.

Dividend

Employees contribution towards PF, Super annuation fund

Income from interest on securities

Income from letting out on hire of machinery, plant and furniture

Payment under keyman insurance policy

Income from letting out on hire of machinery, plant and furniture

Payment received under keyman insurance policy

Any sum received without consideration

Any sum of money or immovable property received without

consideration

Shares received by a firm or a company

Income by way of interest received on compensation

Consideration for know how

Other miscellaneous receipts

Personal Income Tax Slab

Current year Total Income
Tax Slab Rate
Up to 250,000*

Nil

250,001-500,000**

10%

500,001-1,000,000

20%

1,000,001 and above

30%
15

*300,000 for individual 60 years but less than 80 years.

500,000 for individual 80 years or more
** Rebate of 2000 is available if taxable income is up to 5 Lakhs

IN TPDDL INCOME TAX IS LEVIED ON THE

FOLLOWING TWO HEADS:

Income from Business and Profession

Income from Other sources

Income from Business and Profession

The main Business of TPDDL is distribution of electricity in North and North
Western parts of Delhi, so the company earns major part of the revenue from the
same. Yearly approximately revenue of TPDDL is about INR 4000 Crores.
The various Professional services are also provided by the company. Some of them
are the following: Management consultants
Advertising Agency
Consulting Engineer
Manpower recruitment agency
Scientific and technical consultancy
Erection, Commissioning and Installation
Commercial Training and Coaching
Sponsorship Service etc

Income from Other Sources

The various other sources of TPDDL are the following: Interest on securities
Income from other than energy business
16

Interest on investment in government securities

Late payment surcharge collected
Miscellaneous Income

TDS
Every individual, company, firm, organisation are affected by the tax laws. Taxation
enables the government to mobilise a substantial amount of revenue. The tax revenue
is generated by imposing direct taxes and indirect taxes. The report analyses the types
of Direct taxes and Indirect Taxes and in-depth study of the taxes which are levied by
the TPDDL.

WHAT IS TDS?
TDS means Tax Deducted Source. It is the amount withheld from payments of various
kinds such as salary, contract payment, commission, etc. This withheld amount can be
adjusted against your tax.
TDS is one of the modes of collecting Income-tax from the assesses in India. This is
governed under Indian Income Tax Act, 1961, by the Central Board for Direct Taxes
(CBDT) and is part of the Department of Revenue managed by Indian Revenue
Service (IRS).
A method of tax collection on income assessments in India. The tax collection can be
affected if the income increases. The taxpayer pays tax on income from the preceding
year. Tax collection is therefore delayed until the year has been completed. In order to
prevent from hiding income, the government collects some amount of tax owed from
the amount that is receivable by the tax payer.
Income is earned over a period of time but the assessment/ determination of tax
liability takes place much later. To avoid a liquidity problem for the tax payer and also
to ensure a regular flow of revenue for the government, the Income tax Act has
provided for periodic recovery of tax from income liable to tax by requiring the tax to
be deducted at source from certain income/payments as and when such
17

income/payments are credited. The concept of TDS is that the person responsible for
making certain specified payments is required to deduct tax at the prescribed rates
from the payments made to a specified recipient in accordance with the provisions of
the Income Tax Act.

TDS - Procedure for Deduction / Challan / Return / Certificates

1: Deduct correct TDS

9: Verify submitted return

1.

Salaries

1.

PRN or RRR number

2.

Non Salaries

2.

Login

3.

Consequences of not making Tax deduction

3.

Verification

4.

Action after verification

5.

Analyzing the challan status and further

action

2: Make correct challan/payment

1.

Points to be considered before making a

payment

2.

Steps to make a payment

10: Inconsistencies in TDS returns

3: Verify a paid challan

1.

Notice from DGIT [Systems]

1.

What is CIN?

2.

Content of Notice

2.

If banks does not provide a Proper CIN?

3.

How to verify the inconsistencies

3.

Steps to verify the challan

11: Correction in regular return

4: Verify deductee / Employee PAN

1.

Correction Statement

1.

Verifying a PAN

2.

Types of Corrections

2.

Steps To verify the PAN

3.

General Notes on Correction Statement

3.

Letter to missing/Wrong PAN deductees

4.

Consequences of wrongly quoting a PAN

12: Submit a correction statement

5: Deduction-to-payment verification
1.

Points to be noted while verifying

Deduction-to-payment

1.

Procedure to submit

2.

Return not accepted by TIN FC

3.

Batches in the Correction

13: Verify a correction statement

6: Prepare correct statement

18

1.

Deductor

1.

Login

2.

Deductee

2.

Verification

3.

Valid PAN Percentage

4.

Deductions

5.

Salary details

6.

Challan Details

1.

TDS certificates

7.

Challan and Deduction link

2.

How it will be useful

3.

Compulsion/Optional

14: TDS register maintenance

1.

Types of registers

15: Issue TDS certificate

7: Submitting a Regular Return

1.

What the law says?

4.

Types of TDS certificates

2.

Type of submission

5.

Issuing the certificate

3.

Return not accepted by TIN FC

6.

Covering Letter

4.

Form 27A

16: Prepare ITR

8: Due dates for filing of TDS/TCS returns

1.

Late filing consequences

1.

ITR-1

2.

ITR-2

3.

Other ITR forms

Quoting of Tax Deduction/Collection Account Number (TAN)

All persons deducting or collecting Tax at source are required to apply for and obtain
a Tax Deduction/Collection Account Number (TAN). Quoting of TAN of the deductor
is mandatory in the TDS Challan, TDS return, TDS certificates and other TDS related
transactions. Application for obtaining TAN is to be made in Form No.49B at any of
the TIN FCs.

Improving compliance with provisions of quoting of PAN (from 1-4-2010

onwards)

19

It is now mandatory for the tax payer/ deductee to furnish his PAN to the deductor,
failing which the deductor shall deduct tax at source @ 20% or the rate in force,
whichever is higher.TDS would also be deductible @20% in cases where the tax
payer files a declaration inForm.No.15G or 15H without quoting his/her PAN. No
certificate under section 197 will be granted unless the application contains the PAN
of the applicant.
RESPONSIBILITIES OF THE DEDUCTOR/COLLECTOR

DEDUCT TAX AT THE TIME OF PAYMENT/ CREDIT

Any person responsible for paying any sum, on which tax is deductible,

shall deduct tax at the prescribed rates at the time of payment/credit.

DEPOSIT DEDUCTED TAX WITHIN THE PRESCRIBED TIME

LIMITS:
1.) In case of Government deductors: on the same day when tax is paid
without production of an IT challan (book adjustment) within 7 days
from end of the month, when tax paid is accompanied by an IT challan.
2.) In case of others: within 7 days from end of the month in which tax is
deducted for TDS made in March: On or before 30th April

Mode of remittance of tax

Remittance of TDS is to be made in Challan type 281.

Use separate challans for tax deducted under each section and also for
different types of deductees.

Indicate the correct nature of payment.

The 10 digit TAN should be correctly mentioned in the challan.

Ensure that the Financial Year and Assessment year are indicated correctly in
the challan.

20

All companies and other assesses (who are subjected to compulsory Audit u/s
44AB) are required to make electronic payment of tax through internet
banking facility offered by Authorized banks.
Proof of remittance of tax
After the taxes are paid, the collecting bank branch will give a counterfoil as
acknowledgement for the taxes paid. Ensure that the bank has mentioned the Challan
Identification Number (CIN) on the counterfoil. If not, immediately take up the matter
with the bank. CIN comprises of the following:

Bank Branch Code (BSR code) 7 digits

Challan serial number up to 5 digits

Date of tender of challan DD/MM/YYYY

Book Identification Number (BIN)

In case of Government Offices where tax has been paid to the credit of Central
Government without the production of a challan (book adjustment), the Pay and
Accounts Office (PAO), Cheque Drawing and Disbursing Office (CDDO), District
Treasury Office (DTO) or an equivalent Government Office is required to File Form
No.24G within ten days from the end of the month in electronic form. A unique seven
digit Accounts Office Identification Number (AIN) shall be allotted by the Directorate
of Income Tax (Systems), to every AO .On filing of Form No.24G, TIN Central
System will generate Book Identification Number (BIN) to the AOs. The Accounts
Officers filing Form No.24G should intimate the BIN to all the DDOs who are
included in Form 24G. BIN is to be reported in the TDS/TCS statement filed by the
DDOs. BIN comprises of the following:

Receipt Number 7 digits for each 24G

DDO Serial Number 5 digits unique no. for each DDO

Date of tender of challan DD/MM/YYYY

Verification of tax payment information transmitted to TIN

and procedure
For Challan Correction
The collecting bank branch will transmit the details of taxes
deposited by the deductortothe Tax Information Network (TIN)
through the Online Tax Accounting System (OLTAS). All details of

21

payment as uploaded by the banks are available at the NSDL

website www.tin-nsdl.com under the link Challan Status Enquiry.
The deductor must verify the details that have been captured and
transmitted by the bank before filing the Quarterly Statements. If
there is any mistake in the challan, a correction request has to be
filed to the Bank. The fields that can be corrected through the bank
are tabulated below.

Sl.No
1.
2.
3.
4.
5.
6.

Type of Correction
TAN/PAN
Assessment Year
Total Amount
Major head
Minor Head
Nature of Payment

Period for Correction request to Banks

within 7 days from challan deposit date
within 7 days from challan deposit date
within 7 days from challan deposit date
within 3 Months from challan deposit date
within 3 Months from challan deposit date
within 3 Months from challan deposit date

TABLE 1.1
After the expiry of the window period available to banks for challan
correction, the deductor can make a request for challan correction
to the Jurisdictional TDS Assessing Officer.

ISSUE OF TDS/TCS CERTIFICATES TO THE DEDUCTEES

Every person deducting tax is required to issue TDS certificates in the prescribed
form to the deductees within the specified time. From F.Y 2012-13 onwards the
procedure for generating the TDS certificates has been significantly revised. It is
now mandatory for all the deductors to issue the TDS certificates after generating
and downloading the same from TRACES(www.tdscpc.gov.in).
All deductors shall generate and download Part A of Form No.16 through the
TRACES portal in respect of all sums deducted on or after 1-4-2012. (Applicable for
the assessment year 2013-14 onwards). Part A of Form No.16 shall have a unique
TDS certificate number. The deductor after downloading Part A of Form No.16, shall,
before issuing it to the deductee, authenticate the correctness of the contents
mentioned therein and verify the same by using his/ her signature. (Manual/
Digital).Part B of the Form No.16 shall be prepared by the deductor manually and
issued to the deductee, after due authentication and verification, along with the Part A
of the Form No.16.
22

The forms prescribed periodicity and the due dates for issuing the certificates are
given below.
Form No.
16 (Salary)

Periodicity
Annually

Due Date
Before 31st May immediately following

16A (Others)

Quarterly

the end of the financial year

Within fifteen days from the due date for

Monthly

furnishing the quarterly statement of TDS

Within a period of one month from the end of

27D ( for Tax

Collection at Source)
TABLE1.2

the month in which collection was made.

The certificate should specify

Valid PAN of the deductee

Valid TAN of the deductor

Challan Identification Number(CIN) in case of payment through banks

Book Identification number (BIN) in case of book adjustment

Receipt number of relevant quarterly statements.

Unique TDS certificate number.

FILING OF QUARTERLY STATEMENTS

Every person responsible for deduction/ collection of tax should file quarterly
statements of tax deducted/ collected at source. Filing of TDS quarterly statements in
electronic form is mandatory where,
1) The deductor is an office of the Government,
2) Principal Officer of a company,
3) A Person who is required to get his accounts audited u/s.44AB in the immediately
preceding year,
4) The number of records of deductees is 20 or more in a statement for any quarter.
The deductor at the time of preparing of statements of tax deducted shall
23

Quote his Tax deduction Account Number (TAN) in the statement

Quote his PAN in the statement (not applicable for Government Deductors)

Quote PAN of all deductees

Furnish particulars of tax paid to the Central Government including Book

Identification Number (BIN) or Challan Identification Number (CIN) as the

case maybe.

Furnish particulars of amount paid or credited on which tax was not deducted
in view of the issue of certificate of no deduction of tax under section 197 by
the Assessing Officer of the payee

Furnish particulars of amount paid or credited on which tax was not deducted
inview of the compliance of provisions of Section 194C (6) by the payee.
(payments to transporter if PAN has been provided)

Furnish particulars of amount paid or credited on which tax was not deducted
inview of the declaration under section 197A (1) or (1C). (Self declaration
filed in Form No.15G/15H)

Furnish particulars of amount paid or credited on which tax was not deducted
inview of the notification issued under section 197A(1F) (institutions notified
by the Central Government)

Deductors can prepare the quarterly e-TDS returns using in-house software or
using the Return Preparation Utility (RPU) developed by NSDL. This utility is
freely downloadable from the websites www.tin-nsdl.com. At the time of preparing
quarterly e-TDS/TCS statements, the following precautions need to be taken:

Quote the correct TAN, name & address. TAN should be the same as quoted in
your tax payment challans.

Provide details of challans by which taxes have been deposited in the bank
(i.e. the amount of tax deposited and CIN). Verify the CIN details uploaded by
the banks to TIN before these details are included in the statement.

The challan amount mentioned in the statement should be exactly the same
amount as deposited through the challan. This will enable matching the
challan details provided in the statement with the challan details uploaded by
banks.
24

Against each challan, indicate the details of deductees on whose account the
tax has been deducted.

Even if the actual tax deposited as per the challan is higher than the total of the
amount of tax deducted on account of the deductees, challan details should
contain the amount deposited as per the counterfoil.

If TDS for two months (June and July) was paid using one challan, the same
challan details are to be repeated in item 4 of the TDS form for both Q1 and
Q2. However, please ensure that the total TDS deposited for the corresponding
deductees given in statements for both quarters should be less than or equal to
the challan amount.

Quote correct Permanent Account Numbers (PAN) of the deductees.

After the file is prepared, the file has to be validated using NSDLs File
Validation Utility(FVU), which is also available in the NSDL website. After
validating the file with File Validation Utility (FVU), copy the .fvu file on a
Compact Disk/Pen Drive, and affix a label mentioning TAN, Assessment Year,
Form Number, Periodicity and name and furnish the

same to any TIN

facilitation Centre, and obtain acknowledgement thereof along with

Provisional Receipt Number (PRN). Each quarterly e-TDS returns should be

accompanied by a duly filled and signed Form.No.27A in physical form.
The deductor shall ensure that

Quarterly e-TDS/TCS statement is in conformity with the file format notified

by the Income Tax Department

Each quarterly e-TDS/TCS statement (Form 24Q, 26Q, 27Q and 27EQ) is in a
separate CD/Pen drive.

Each quarterly e-TDS/TCS statement is accompanied by a duly filled and

signed(by an authorised signatory) Form 27A in physical form.

More than one CD/Pen drive is not used for furnishing one Quarterly
statement.

Quarterly e-TDS/TCS statement should be compressed, if required, only by

using Winzip 8.1 or ZipItFast 3.0 (or higher version) compression utility to
ensure quick and smooth acceptance of the file.

25

Label mentioning TAN, name of deductor/collector, period to which statement

pertains (quarter and F.Y.) and Form no. (24Q, 26Q, 27Q or 27EQ) is affixed
on each CD/Pen Drive for the purpose of identification.

There is no overwriting/ striking on Form 27A. If there is any, then the same
should be ratified by an authorised signatory.

TAN quoted in quarterly e-TDS/TCS statement and stated on Form 27A is the
same.

Confirm

new

TAN

by

using

search

facility

on

ITD

website(www.incometaxindia.gov.in)

TAN details (name, address, etc.,) of the deductor as provided in the quarterly
e-TDS/TCS statement should be same as in the TAN database maintained by
ITD(these details can be verified with the TIN-FC or the ITD web-site

www.incometaxindia.gov.in). If they are different, the deductor shall submit a

TAN change request application to update the ITD TAN database.

Quarterly e-TDS/TCS statements pertain to the period for which they are
allowed to furnish.

The quarterly e-TDS/TCS statement has been successfully validated through

the latest version of the FVU.

Control totals, TAN and name mentioned in the quarterly e-TDS/TCS

statement match with those mentioned on Form 27A.

CD/Pen Drive is virus free.

Due dates for filing of Quarterly Statements

Form No.

Particulars

24Q

Quarterly return of
TDS from Salaries
July 31st
Quarterly return of TDS
in respect of all payments
other than Salaries
October 31st

26Q

Due
date
for Due
date
for
furnishing statement furnishing
Government
statement Non govt

26

July 15th
October 15th

Quarterly
return
in January 31st
respect
of payments made to
May 15th
Non resident
Quarterly Return of TCS July 15th, October
15th,
January 15th , May
15th

27Q

27EQ

January 15th
May 15th
July 15th, October
15th,
January 15th ,
May 15th

TABLE1.3
Quarterly returns (24Q) in respect of employees who are with the employer for
apart of the year
Where an employee has worked with the deductor for part of the F.Y only, the
deductor should deduct tax from his salary and report the same in the Q.R of
respective quarter(s).Further while submitting Form No.24Q for the last quarter, the
deductor should include the particulars of that employee in Annexure II and III
irrespective of the fact that the employee was not under his employment on the last
day of the year.
The Quarterly Return in Form No.24Q in respect of Salaries is to be filed in
respect of every employee whose income under the head Salaries exceeded the
Maximum amount not chargeable to tax.

CORRECTION STATEMENT
The returns/ statements relating to TDS/ TCS are required to be complete and
correct. However, a procedure has been provided for correction of any genuine
mistakes in the original returns/ statements by way of submission of correction
returns/ statements. Financial Year (F.Y.), Assessment Year (A.Y.) and Quarter cannot
be updated by correction statements. Values in these fields have to be same as
specified in corresponding regular statements.

27

For preparing the correction statement, the Consolidated File for the relevant
Quarter should be downloaded from TRACES website (www.tdscpc.gov.in). This file
has to be imported to the RPU for making necessary correction. Correction statement
can be furnished multiple times to incorporate changes in the regular TDS/TCS
statement.
Importance of e-TDS Returns
The computerised processing of the e-TDS returns filed by tax deductors is now in
sync with the processing of individual returns of income filed by the deductees. In
view of this ,credit for the taxes deducted at source by the deductor cannot be given
only on the basis of TDS certificates mentioned in the return of income. The deductee
is given credit for the taxes deducted only if the tax deducted has been paid and the
deductor has filed the relevant quarterly e-TDS Return. It is also essential that in the
e-TDS Return, the correct
PAN of the deductee and the amount deducted is mentioned. The details of payment
i.e BSR code, serial number and date of payment should also be correctly mentioned
in the return.
Claim for refund
A claim for refund for TDS paid to the credit of the Central Government shall be
furnished by the deductor in Form No.26B electronically under Digital Signature.

CONSEQUENCES OF NON COMPLIANCE

WITH TDS PROVISIONS
I. EXPENDITURE CLAIMED IS DISALLOWED
As per section 40(a)(ia) of the IT Act, the following expenditure will be disallowed
from computation of business income of the deductor, if TDS is not made or tax
deducted has not been paid on or before the due date for filing return of income.
28

Interest (TDS u/s194A) Commission or Brokerage (TDS u/s194H)

Rent (TDS u/s194I) Professional/technical fee/Royalty (TDS u/s194J)
Amount paid to a contractor or sub contractor (TDS u/s194C)
The above expenditure will be allowed as a deduction in computing the income of the
previous year in which such TDS has been paid.
II. ASSESSEE IN DEFAULT
An assessed shall be deemed to be in default in respect of:
1. Non deduction of tax at source
2. Non payment, in whole or in part, of the tax deducted
Amendment to section 201
W.e.f 1-7-2012, if the payer has not deducted tax, he shall not be deemed to be an
assessee in default in case:

The recipient has included such income in the return submitted u/s.139 and
has paid tax on such income and

The payee submits a certificate to this effect from a chartered accountant

(Form No.26A)
The amendment is not applicable if the recipient is a Non resident. If any
deductor who is not considered as an assessee in default as per the above provision,
interest u/s.201(1A) underclause(1) shall be payable from the date on which such tax
was deductible to the date of furnishing of return of income (w.e.f 01.07.2012).

III. INTEREST
Section
201(1A)

Nature of default
Non-deduction of

tax

Interest
at
simple interest @ 1% per

source, either in whole or part.

month from the date on which

After deduction,

tax was deductible to the date

Non payment of tax, either in

on

whole or part.

deducted

Non-payment of tax u/s

29

which

tax

is

actually

192(1A).

@1.5% per month from the

date

on

which

tax

was

deducted to the date on which

tax is actually paid
TABLE 1.4

IV. LEVY OF FEE U/S.234E (w.e.f.01-07-2012)

Failure to file TDS/TCS quarterly statements shall be liable for a fee of Rs.200 per
day of default and shall not exceed the amount of tax deductible or collectible. The
fee shall be paid before delivering the quarterly statements.
V. PENALTY
Section
271C

271CA

271H(1)(a)

Nature of default
Failure to deduct the whole

Penalty
Sum equal to the amount of

or any part of tax at source

tax which was failed to be

Failure to collect the whole or

deducted
Sum equal to the amount of

any part of tax at source (TCS)

tax which he failed to collect

Failure to submit quarterly return

Penalty

of

Rs.10,000

to

Rs.1,00,000.
No penalty shall be levied if
the
Returns are filed within a
period of one year from the
271H(1)(b)

for furnishing quarterly returns

due date.
Penalty of

with incorrect information

Rs.1,00,000.

Rs.10,000

to

No penalty shall be levied if

the
returns are filed within a
period of one year from the
30

due date.
272B

Failure to comply with provisions

Rs.10,000

of Section139A for quoting Pan

272BB

Failure to obtain TAN

Rs.10,000

272A(2)

1. Failure to issue TDS certificates

Rs.100 for every day during

2. Failure to deliver declaration in

which the failure continues

Form15G/15H

but the penalty shall not

3. Failure to file quarterly

exceed the amount of tax

statements (only till 30-06-2012)

Deductible

TABLE1.5
VI. PROSECUTION
Section
276B

Nature of default
Failure to pay Tax Deducted at

Prosecution
Punishable with rigorous imprisonment for

Source

minimum
3 months , maximum 7 years

276BB

Failure to pay Tax Collected at

and with fine

Punishable with rigorous imprisonment for

Source (TCS)

minimum
3 months , maximum 7 years
and with fine

TABLE 1.6
PROVISIONS FOR DEDUCTION OF
TAX FROM SALARIES (SECTION 192)
Every person responsible for paying any income chargeable under the head
Salaries shall deduct Income Tax on the estimated income of the employee. Income
tax is required to be calculated on the basis of the rates given in Part III of the Third
Schedule of the Finance Act and shall be deducted equally at the time of payment.
Salary is taxable on due basis or on receipt basis whichever is earlier. Tax deduction is
required only at the time of payment of salary.
Salary includes:
1. Wages
2. Any annuity or pension
31

3. Any gratuity
4. Any fees, commission, perquisites or profits in lieu of salary
5. Any advance of salary
6. Encashment of leave not availed
7. Interest earned in excess of 9.5% on Recognised Provident Fund
8. Amount contributed by Employer to Recognised Provident Fund in excess of
12% on salary

Fully Taxable Allowances

Dearness Allowance
Rural Allowance
Deputation Allowance
Tiffin Allowance
TABLE 1.7

City Compensatory Allowance

Proctorship Allowance
Overtime Allowance
Fixed Medical Allowance

Wardenship Allowance
Project Allowance
Interim Relief
Servant Allowance

Some of the other Allowance which are exempt to the extent of limit specified
Nature of allowance
Hill compensatory

Limit specified
Rs.300 p.m to Rs.7000 p.m

Remarks
Rule 2BB

Transport Allowance

Rs.800 p.m

Rs.1,600 for blind and

Children education

Rs.100 p.m per child

Handicapped
Maximum 2 children
Allowance

TABLE1.8
Specific Allowance that are fully exempt (Section 10(14))
Nature of allowance
Travelling Allowance

Condition for complete Exemption

Should be expended by the employee to meet the cost of

Daily Allowance

official tour or transfer expenses

Should be expended by the employee for meeting the
daily charges incurred on a tour
32

Conveyance Allowance

Should be used by the employee to meet the expenditure on

Academic Allowance

conveyance in performance of official duties.

Should be used by the employee for his academic

Uniform Allowance

Purpose
Should be expended by the employee for purchasing/
maintaining office uniform for official duties.

TABLE1.9

Taxability of House Rent Allowance

As per section 10(13A), an employee who is in receipt of House Rent Allowance can
claim exemption , if he does not live in his own house, and pays rent in excess of 10%
of salary(Basic+ DA considered for retirement benefits+ Fixed commission )for his
residential accommodation.
Least of the following is allowed as exemption
1. Actual amount of HRA Received
2. Rent paid in excess of 10 % of Salary
3. 40% of salary

Taxability of Gratuity [Section 10(10)]

Gratuity received by Government Employees or employees under Civil Services is
fully exempt from Tax. The exemption is available even if the employee after leaving
the Government services joins the private sector.
If covered under payment of Gratuity Act, 1972, Least of the following is exempt

Actual Gratuity Received

15/26 X Last Drawn Salary X Completed years of service +Part thereof

Rs.10,00,000 (Rs.3,50,000 upto May 23,2010)

Others
Least of the following is exempt

Actual Gratuity Received

X Average salary for 10 months preceding the month of retirement X No. of

fully completed years of service
33

Rs.10,00,000 (Rs.3,50,000 upto May 23,2010)

Taxability of Commutation of Pension [Section 10(10A)]

Any payment of commutation of pension received by a Government employee is fully
exempt. Commutation of pension on annuity plan of LIC is also exempt.
Non government employee in receipt of Gratuity, 1/3rd of full value of pension is
exempt. Non government employee not in receipt of Gratuity, 1/2 of full value of
pension is exempt.
Taxability of Leave Encashment [Section 10(10AA)]
Leave encashment while in service is fully taxable. Leave encashment on retirement
received by a Government employee is fully exempt.
Non Govt. Employee, the least of the following is exempt. :

Actual encashment received

Average salary for past 10 month X 10 months

Rs.3,00,000

Leave at Credit (calculated at 30 days credit for each completed year of

service leave availed) X Average Salary for Past 10 Months (For this
purpose, Salary = Basic +DA(If part of retirement benefit + Commission if
fixed percentage of turnover.)

Taxability of Voluntary Retirement Scheme [Section 10(10C)]

An individual who receives voluntary retirement compensation is entitled for

exemption u/s.10(10C) in respect of the amount. The scheme should be in accordance
with guidelines framed by the Government (Rule 2BA). Maximum exemption amount
is Rs.5 lakhs.

Not Available if:

-

Employed in another company of same management

Should not have claimed exemption earlier for VRS scheme

Exemption u/s.10(10C) can be availed only Once in his life time.

Taxability of Medical Facilities

34

Medical Allowance is fully taxable. The following are tax free medical benefits

The value of medical treatment provided to an employee or any member of his

family in any hospital maintained by the employer.

Any sum paid by the employer in respect of any expenditure actually incurred
by the employee on treatment of his or any member of his family in any
hospital maintained by the Government, Local authority or approved by the
government for the purpose of medical treatment of its employees.

Any sum paid by the employer in respect of the prescribed diseases in any
hospital approved by the Chief Commissioner of Income Tax [Section 17(2)
(v)].

Any other medical reimbursement subject to a maximum of Rs.15,000

Deduction to an employee against his salary

1. Entertainment allowance [Section 16(ii)]: In the case of government employees the
least of the following will be allowed as deduction.

Actual amount of entertainment allowance received

20% of the Basic salary

Rs.5,000

2. Professional Tax [Section 16(iii)]: Professional tax or tax on employment

actually paid by an employee shall be allowed as deduction.
TDS RATES & RELATED PROVISIONS - FINANCIAL YEAR 2013-14
(ASSESSMENT YEAR 2014-15)
Section
Nature of Payment
Payment in
Rate of
Rate of
excess of
deduction in
deduction in
individual
others
192
Salary
Rs. 200,000
As per finance
act
194A
Interest from a banking
Rs. 10000 P.A
10%
10%
company
35

194A

Interest other than from a

banking company
Winnings from
Lottery/Crossword puzzles

194B

194C

Payment to Contractors

194D
194G

Insurance commission
Commission on sale of
lottery tickets
Commission or Brokerage
Rent of Land & building

194H
194I
194I
194IA
194J
194LA
195

Rent of Plant & Machinery

etc.
Transfer of immovable
property
Payment for
professional/technical
service
Compensation on Land
Acquistion
Payments to non-resident

Rs. 5000 P.A

10%

10%

Rs. 10,00,000
P.A

30%

30%

Rs.30,000 per
payment or Rs.
75000 P.A
Rs. 20,000 P.A
Rs. 1,000 P.A

1%

2%

10%
10%

10%
10%

Rs. 5,000 P.A

Rs. 1,80,000
P.A
Rs. 1,80,000
P.A
Rs.50,00,000

10%
10%

10%
10%

2%

2%

1%

1%

Rs.30,000 P.A

10%

10%

Rs.2,00,000
P.A
Any sum

10%

10%

As per rates in
force

As per rates
in force

TABLE1.10

DUE DATES GOVERNMENT DEDUCTORS

PAYMENT
QUARTERLY
RETURN ISSUE OF CERTIFICATE
FILING
same day where the tax is
1st quarter July 31st
1st quarter August15th
paid without IT Challan
2nd quarter October 31st
2nd quarter November15th
(book adjustment)
3rd quarter January 31st
3rd quarter February 15th
4th quarter May 15th
4th quarter May 30th
within 7 days from end
of the month, where tax
salary: Form No.24Q
Salary : Form No.16
is paid accompanied by
Others: Form No.26Q
Others : Form No.16A
an IT Challan.
NRI : Form No.27Q
TCS : From 27D
Challan No.281

Form No.27A to be filed

along with TDS quarterly
36

statements
TABLE 1.11
DUE DATES OTHER THAN GOVERNMENT DEDUCTORS
PAYMENT

ISSUE OF CERTIFICATE

within 7 days from end

of the month.

QUARTERLY RETURN
FILING
1st quarter July 15th
2nd quarter October 15th
3rd quarter January 15th
4th quarter May 15th

for TDS made in March

: On or before 30th
April
Challan No.281

Salary : Form No.24Q

Others : Form No.26Q
Non resident : Form No.27Q
TCS : Form No.27EQ

Salary : Form No.16

Others : Form No.16A
TCS : From 27D

E-payment compulsory
For Corporate assessees
(Companies) Assessees to
whom provisions of
section 44AB of the IT
Act are applicable
TABLE1.12

Form No.27A to be filed

along with TDS/TCS
quarterly statements

TDS certificates shall be

issued by downloading from
TRACES Portal
(WWW.TDSCPC.GOV.IN)

1st quarter July 30th

2nd quarter October 30th
3rd quarter January 30th
4th quarter May 30th

DELHI VALUE ADDED TAX (DVAT) ACT,2004

DVAT Act 2004 is an act to consolidate and amend the law relating to levy of tax on
sale of goods, tax on transfer of property involved in execution of works contract, tax
on transfer to use goods and tax on entry of motor vehicles by way of introducing a
value added tax regime in the local areas of the National Capital Territory of Delhi.

Imposition of tax:

Subject to other provisions of this act, every dealer who is

A. Registered under this act or,
B. Required to be registered under this act;

Shall be liable to pay tax calculated in accordance with this act, at the time and in the
manner provided in this act.
Every dealer shall be liable to pay tax at the rates specified in section 4 of this
act on every sale of goods effected by him.
The amount of tax payable under this act by a dealer, is the dealers net tax
period calculated under section 11 of this act.
The net tax of a dealer shall be paid within first 28 days of the conclusion of
the dealers tax period.
Tax shall be paid in the specified manner in the section 36 of this act.
Every dealer who has become liable to pay tax under this act on the sales of
the goods shall continue to be liable unless his taxable turnover during the

37

preceding 12 months has remained below the taxable quantum and on the
expiry of 12 months or such further period his liability to pay tax shall cease.
Every dealer who has become liable to pay tax under this act has ceased or
whose registration has been cancelled, shall if his turnover calculated from the
commencement of any year be liable to pay tax on and from the date on which
his turnover exceeds the taxable quantum , on sales effected by him on and
after that day.
Where it is found that any person registered as a dealer ought not to have been
registered, then notwithstanding anything contained in this act , such person
shall be liable to pay tax for the period during which he was registered.
If any person who transports goods or holds goods in custody in custody for
delivery to or on behalf of any person , on being required by the commissioner
so to do failsA. To furnish any information in his possession in respect of the goods; or
B. Fails to permit inspection thereof;

Then without prejudice to any other action which may be taken against such person, a
presumption must be raised that the goods in respect of which he has failed to furnish
information or permit inspection, are owned by him and are held by him for sale in
Delhi and the provisions and the provisions of this act shall apply accordingly.

Certain Sales not liable to pay tax

In the course of inter-state trade or commerce; or
Outside Delhi; or
In the course of import of the goods into or export of the goods out of , the
territory of India
The rate of DVAT varies 5% to 12.5%
On goods of special importance (essential commodities) like cotton, bidi, wheat
,cereals ,iron, steel, jute etc the DVAT rate is 5%

Central Sales Tax (CST) Act,1956

This act may be called the Central Sales Tax Act, 1956
It extends to the whole of the India
Its shall come into the force on such date as the Central Government may, by
the notification in the official gazette, appoint and different dates may be
appointed for the different provisions of this act.

This tax is levy on purchase and sale of goods said to be take place outside a state.
In TPDDL main work is generation and distribution of electricity but it is
exempted from tax , so in TPDDL Sales Tax is levied on the following
transactions:
Sale of scrap or obsolete items
Maintenance of street lights
38

Used car sales

Used laptop sales

List of scrap items: Transformers

Cable wire
Iron scrap
Air conditioner
Wooden goods
Waste paper etc
In case of scrap sales if vendor issue the C form against the sold items then the rate of
CST will be 2% else it will be higher up to 20%

Concessional List of Purchase Items

All kinds of transformers
All kinds of switches and switchgears
Battery , Battery chargers
All types and kinds of cable
All kinds of electric and electronic systems
Fire protection system & fire extinguishers
Generators
All kinds of Poles
Natural gas
IT related equipments and systems
All types of danger boards
All types of computer software
Meter seals and meter boxes

In case of purchase of items, if TPDDL purchases any goods from outside Delhi and
issues the C form, then the CST rate will be 2%, else it will be higher up to 20%
A company can issue C form only against registered items. Registered items are
mentioned under the RC issued by the sales Tax authorities.
TPDDL deposits DVAT and CST monthly and submits the file to the DVAT officer.

SERVICE TAX
39

It is a tax on services rendered by one person to another. It is not meant to be a tax

on anything else. The levy of service tax pre-supposes the existence of two important
aspects: There should be a tax by means of imposition of a charge
The charge should be on services rendered.

OBJECTIVES
The objectives of study are as follows:

To understand the Tax Deducted at Source(TDS) process, which comes under

the Income Tax Act 1961

To know the various types of taxes are paid by the company

To understand the importance of taxation in an organization

Getting a more practical insight into the tax filling process.

40

LITERATURE REVIEW
There are many researches done in the past by many researchers on TDS, e-TDS ,
filling of TDS, etc
Geetha R. And Sekar M studied the tax payers perception, awareness towards filling
of income tax returns, and to analyse the level of satisfaction among the tax payers
towards e-filling of income tax returns. Their study reveals that 56% of the
respondents are female. It is inferred from the above that majority of the individual
tax payers are male (56%) it is concluded that there is no significance relationship
between the residential status and the level of awareness regarding the e-filing of
income tax returns, time limit of returns, cost of e-filing , website address, digital
signatures, usage of computer software for e-filling , e-payment through banks, TDS
returns, registration number, usage of IRS forms and the terms and conditions of epayment.
Dr. Y. M. Dalvadi studied the preparation of e-TDS return File, Forms
24,26,27,,27E,24Q,26Q 26QA,27EQ,16,16A,16AA, 22,27D by giving single input,
Salary Calculation, Rebate, Relief u/s 89, Data can be imported from MS-Excel
Files/Text Files and FVU Files. Generation of TDS/TCS Certificates (Form 16,
16A,27D) in PDF Format signed with Digital Signature. Preparation of TDS/TCS
41

Book Adjustment Form (TBAF). Study shows that technology does not give
guarantee for reduction to taxation is too low among SMEs so it is advisable to
increase the usage so that they can be relieved from stress from complex rules and
regulation and concentrate in the main business and strategy for the development of
enterprise.
Saumen Chattopadhay and Arindam Das Gupta studied that TDS has a uniformly
significant and positive effect on taxes paid and also a uniformly positive on tax
compliance for two of the three tax compliance variables.
The latter impact accords with the finding of the Crane and Nourzad (1994) for US
tax payers. However the finding must be taken to be inconclusive, since the TDS
effect for the third tax evasion variable was uniformly positive, through uniformly
insignificant and numerically small.

Taxation Policy has been a widely debated issue all over the world. A large number of
studies have been conducted covering different aspects of income tax structure such
as personal income tax, capital gains taxation, agricultural taxation, efficiency of
income tax administration etc. over the years. In this chapter, the available literature
was studied to get an insight into the main objectives of the study. The review of
literature is confined to India only as income tax legal frame work varies from country
to country. Moreover, reports of important committees constituted by Government of
India have also been reviewed. A brief review of relevant studies in this regard is
given below:

Ambirajan (1961) tried to study the evolution, structure, administration

and future prospects of the corporate income tax in India in the context of
changing ideas and concepts that influenced Indian tax policy. He revealed
that revolutionary tax changes were made only in the post freedom-period. He
found that the corporate tax structure had a minor impact on investment
structure in corporate sector. He opined that Indian corporate tax rates were
very high as compared to even many underdeveloped countries. The study
concluded that there was an urgent need of tax reforms

Boothalingam (1968) was appointed by the Government of India to

examine the structure of direct and indirect taxes in India. He recommended to
abolish the classification of income under various heads for determination of
total income and to allow setting off losses against any kind of income for
improvement in income tax structure. He highlighted that arrears of salary
received when spread over a number of past years, resulted in reopening of
many assessments. Thus, he recommended spreading the arrears of salary
42

received over the future years rather than past years. He suggested for
stablisation in tax rate structure over the years, elimination of surcharge and
raising the exemption limit to Rs. 7500 for individuals and Rs. 10000 for HUF
and discontinuation of personal allowances. He was of the opinion that
number of Public Relation Officers should be increased for the convenience of
the taxpayers.

Singh (1971) examined depreciation provisions under the Income Tax Act with
special reference to their impact on corporate financial decisions. He pointed out that
sound depreciation policy could be adopted by the corporates to minimize their tax
liability. However, depreciation policy could not be used for sound financial decisions
because of some inherent weaknesses in the depreciation provisions under the Income
Tax Act viz. complicated tax depreciation structure with too many rates for different
categories of assets, absence of depreciation allowance on the live stock which were
disabled but could not be sold, difference between actual economic life of plant and

machinery and that depicted in tax laws etc. So the author stressed the need for
a rational and liberal deprecation policy to provide incentives for industrial
development and growth. In the end, he suggested that depreciation should be
based on replacement cost in place of historical cost of the asset.

Aggarwal (1971) analysed the impact of corporate taxes on retained profits

of a concern and performance of corporate sector in India. He also analysed its
impact on public policy. The study covered the period from 1960-61 to 196768 and was based on data collected from RBI Bulletins. He highlighted that
tax structure was not conductive for growth of corporate sector. Lack of
internally generated funds had shown adverse effect on investment in
corporate sector. He suggested a number of measures for rationalizing
corporate tax policy such as exemption to small companies from distribution
dividend tax, revival of development rebate, removal of taxes on inter
corporate dividends and bonus shares.

Sundram and Pandit (1979) tried to find out what ought to be the
logical tax entity and its impact on equity and revenue. The authors opined
that tax entity should be identical with the decision making unit and in India
decisions were taken by nuclear family (Husband, wife and minor children).
Under the existing system of taxation, H.U.F. and individuals have always
been taken as independent assessment units leading to multiple tax entities.
The study found that it resulted in severe revenue loss as each tax entity
enjoyed variety of deductions and exemptions and effective marginal tax rate
43

came down. The authors recommended that nuclear family should be treated
as a single tax entity by eliminating individual and HUF as tax entities.
They estimated that suggested change would generate additional revenue
amounting to Rs. 130 crore and make tax system more equitable. A decrease in
exemption limit on income from approved investments and reduction in
deductions on account of approved savings were also suggested for
rationalisation of income tax system.

Murti (1982) studied different aspect of income tax administration in India

viz. origin and development of income tax in India, the structure and
organization of income tax administration, public relations, recruitment and
training of personnel as well as morale of income tax personnel. The study
reflected both strengths and weaknesses of Indian Income Tax administration
based on its historical evolution since the colonial period. It highlighted that
income tax officials were overburdened with work. The service conditions in
the department were not healthy for accomplishment of goals. The reforms in
administrative machinery were very slow. In the end, the researcher stressed
upon reviewing the income tax administration as a part of the larger Indian
bureaucracy.

Maji and Rakshit (2001) examined the provisions of Income Tax Act
relating to integration of agricultural income with non-agricultural income
over the period 1987-88 to 2000-01. The authors calculated tax liability by
taking different amounts of agricultural income for the purpose of integration
and found that higher the amount of agricultural income, lower was the
effective rate of additional tax. The study highlighted that integration
provision was disproportionate in nature. The researchers opined that
exempting agricultural 84 income from tax was unfair as it resulted in
horizontal inequity, narrowing the tax base and tax evasion. They suggested
that agricultural income should be brought under the purview of Income Tax
Act by amending constitution and a separate head of income should be
inserted for agricultural income. They further suggested that average of the
first two bracket rates should be applicable on the agricultural income.

44

COMPANY PROFILE
Tata Power Delhi Distribution Limited [TPDDL] is a joint venture between Tata
Power and the Government of NCT of Delhi with the majority stake being held by
Tata Power (51%). TPDDL distributes electricity in North & North West parts of
Delhi and serves a populace of 6 million. The company started operations on July 1,
2002 post the unbundling of the erstwhile Delhi Vidyut Board (DVB). With a
registered consumer base of 1.44 million and a peak load of around 1704 MW, the
company's operations span across an area of 510 sq kms.
TPDDL has been the frontrunner in implementing power distribution reforms in the
capital city and is acknowledged for its consumer friendly practices. Since
privatization, the Aggregate Technical & Commercial (AT&C) losses in TPDDL areas
have shown a record decline. AT&C loss is a measure of overall efficiency of the
distribution business which is the difference between units input into the system and
the units for which the payment is collected. Today, AT&C losses stand at 9.87%
which is an unprecedented reduction of around 81% from an opening loss level of
53% in July 2002.
On the power supply front too, TPDDL areas have shown remarkable improvement.
The company has implemented high-tech automated systems for its entire distribution
network. Systems such as, SCADA, Geographical Information System [GIS], Outage
Management System [OMS], DMS and OTS are the cornerstone of the company's
distribution automation project. To fight the menace of power theft, modern
technologies like High Voltage Distribution (HVDS) System and LT Arial Bunch
Conductor have been adopted.
TPDDL has to its credit several firsts in Delhi: SCADA controlled Grid Stations,
Automatic Meter Reading, GSM based Street Lighting system, SMS based Fault
45

Management System, etc. TPDDL has also embarked on its Smart Grid Journey and
has become the first utility to initiate Automated Metering Infrastructure based Auto
Demand Response program in the country which will help in managing peak demand
& Grid stress.
To ensure complete transparency, TPDDL has also provided online information on
billing and payment to all its 1.44 million consumers. TPDDL has added solar
generation as a part of sustainable initiative since 2008. With fifteen (15) Solar Plants
installed at its license area the total capacity till FY 2014-15 is 1.65 MW.
TPDDL is also a member of a Global Intelligent Utility Network Coalition (GIUNC)
which is working towards accelerating the development of common standards,
technology solutions and processes for intelligent networks. TPDDL is the first Indian
utility to join the IUN Coalition which also includes utilities from North America,
Europe and Asia-Pacific regions.
TPDDL is the only utility in the Country to have been empanelled by the Power
Finance Corporation, Govt. of India's nodal implementation agency for its
Restructured Accelerated Power Development and Reforms Program (R-APDRP), as
IT Consultant and SCADA Consultant. TPDDL is also empanelled with the Rural
Electrification Corporation as System Consultant/IT and Energy Auditing and is
currently providing consultancies to various National and International utilities on IT/
SCADA implementation e.g. Haryana, Uttar Pradesh etc. TPDDL has been assigned
with consultancy service project with newly privatized utility in Nigeria.
TPDDL's change management experience, distributed leadership system, adoption of
latest technology; robust competence development process and innovative & open
work culture are the key strategic boosters which helped in building and sustaining
competitive advantage in the changing business scenario.
TPDDL has created several milestones in its journey so far; it is now focused and
committed to the road ahead and is exploring new opportunities to replicate its
experience of distribution reforms both in India and abroad. It is leveraging its unique
learning and skill sets solely and in collaboration with leading utilities and technology
providers in the areas of communications & technology, change management,
consumer service delivery and business process re-engineering.
A journey which began a decade ago for empowering the consumers in Delhi now
holds the potential to transform the distribution sector in India and similarly help
utilities across the globe. Today, TPDDL is providing project management and
consultancy services to the states of Haryana and Uttar Pradesh. It is also exploring
opportunities in Chhattisgarh and Punjab. The company is providing a technical and
management support to a Distribution Company in Nigeria and is also looking for
consultancy assignments in Kurdistan, Turkey and Iraq.
TPDDL is sensitive to the aspect of Climate Change and is committed to introduce
energy efficient and greener technologies. As a part of the Tata Group, TPDDL carries
forward the Group's ethos of giving back to society. In fact, 'Reaching out to
communities TPDDL operates in' is an integral part of the company's mission
statement. This drives a wide array of Corporate Social Responsibility efforts of the
company. TPDDL's CSR Policy rests on four main pillars Employability,
Entrepreneurship, Education and Employment. TPDDL has around 223 Jhuggi Jhopri
46

(JJ) clusters in its licensed area. Apart from enhancement in distribution services,
TPDDL also focuses on community engagement and welfare programmes particularly
in these areas. TPDDL continuously identifies the needs of the local communities and
undertakes relevant initiatives/ drives accordingly. These initiatives includes Adult
Literacy Centers (ALC) for women, Vocational Training Centers (VTC),
neighborhood electrician program, tutorials for children, medical aid, drug-de
addiction support, accidental insurance scheme and safety awareness drives. TPDDL
has also undertaken several community development and welfare activities under its
CSR initiatives to educate, empower and bring about transformation in the lives of
illiterate and downtrodden women, students & children especially belonging to the
families which are economically and socially underprivileged and deprived and
residing in the slum clusters and resettlement colonies within our licensed area
.TPPDL through such initiatives have touched lakhs of lives to improve their living
conditions.

Apart from this, TPDDL also works on various projects to preserve and regenerate the
environment. It is a member of the Greening Agency within the Department of Forest
& Wildlife, Government of Delhi and is committed to promote tree plantation.
TPDDL has been aggressively creating energy conservation awareness though its
Energy Club prograMmes comprising of students from over 190 member schools.
More than 2 lakhs students and 10 lakhs people have been sensitized to the issue of
climate change and conservation through this initiative.
Tata Power Delhi Distribution has won several accolades for its pioneering efforts in
transforming the power distribution scene in its licensed area both at the national and
international levels. It has been conferred with the 'National Award for Meritorious
Performance' thrice by the Ministry of Power, Government of India for outstanding
performance in power distribution. It has also won six Asian Power Awards in a row
and holds a rare distinction of becoming the first power distribution utility from India
to have received the prestigious Edison Award twice, in the international category in
2008 Edison Award for Innovative Implementation of GIS and again in 2009 for
Policy Advocacy.
Some of the other key recognitions include Best Performing Private Discom Award at
Power Line Award- 2013, IPPAI Award 2013, International Palladium Balanced
Scorecard Hall of Fame award- 2008, SAP Ace award 2008; UPN, USA metering
award. It is also the youngest company and the first power utility in India to receive
the prestigious CII EXIM Award for 'strong Commitment to Excel'. It is also the only
distribution utility to receive the ISO 9001, ISO 14001 and OHSAS 18001
certification. TPDDL is the only Indian utility to have SA8000 certification. TPDDL
has been recognized as 2nd best in the "Best in Class Energy, Oil and Gas Industry
by the Great Places to Work, India.
TPDDL has also been a subject of various Case Studies on Organizational
Transformation & Power Sector Reforms, prepared by eminent management
institutions such as IIM Lucknow, MDI Gurgaon, IMI Delhi, TMTC Pune, with the
most recent one being NDPL-The Tata experience of a transformation. Management
consultants, McKinsey and the prestigious Wall Street Journal, USA, have also
47

researched and lauded our performance. TPDDL's Case Study on BSC was published
in Emerald Emerging Case Studies, UK by Faculty of Management Studies (FMS).

MANAGING TEAM
Name

Designation
CEO & Managing Director
CTO & Executive Director
CFO & Chief - Legal & Regulatory
Chief - Commercial
Head - Operations, Systems and Safety
Head - Business Development,Power
Management, Project, Engineering & Contract
Head - Estate Management & Civil
Head - Internal Audit & Risk Appraisal
Head - Human Resources

Praveer Singha
Arup Ghosh
Ajay Kapoor
Sudarshan Kumar Saini
Sunil Singh
Sanjay Kumar Banga
Shiv Ram Bhardwaj
Brajamohan Panigrahi
Sushil Kumar Srivastava
TABLE 2.1

48

49

50

TATA POWER-DELHI DISTRIBUTION LIMITED CSR

POLICY
As a part of the Tata Group, Tata Power Delhi Distribution Ltd. (TPDDL) believes in
the Tata Groups ethos of giving back to society. Rich heritage and unmatchable
legacy of Tata Group for holistic development of underprivileged communities,
societies & nation becomes the guiding force for adoption of community development
initiatives.
TPDDLs CSR vision corroborates being a responsible corporate and aims at imbibing
social alignment as a key component of all its business processes and strategy.
Reaching out to communities we operate in is an integral part of our mission
statement. TPDDLs inclusive approach to reach out to its stakeholders and
maintaining equilibrium brings more agility to the business. The community outreach
programs, working on the lines of triple bottom line approach, aims to serve key
communities in a systematic & planned way.
There are 200+ listed JJ clusters & resettlement colonies which fall in companys area
of operation. The residents of these JJ clusters are basically migrants from different
communities, culture, ethnicity and creed who drifted from their native places. These
clusters also have a very high representation of SC/ST communities which further
emphasizes the need for inducing various developmental initiatives there. Creating
avenues for Education, Employability, Health Services, Environment and
Empowering marginalized societal sections & communities in distress are the focus
areas of community development at TPDDL.
TPDDL looks forward for an enhanced and valuable contribution in the lives of
communities by the company, create a win win situation for all stakeholders and
strives for achieving the milestones of sustainable development and inclusive growth.

Objective of TPDDL CSR programs / projects

CSR programs/projects aim to achieve:
Holistic development in the lives of individuals of JJ clusters and resettlement
colonies residing in TPDDLs licensed area of supply.
Development of active & long term association with communities around for
sustainable, replicable & scalable projects of livelihood, social entrepreneurship and
empowerment of underprivileged sections of JJ clusters & Resettlement Colonies.
Inclusion of employees for value creation/contribution in these communities
through volunteering.

Geographies and Target Communities

51

 CSR programs/projects would be targeted primarily for JJ Clusters & Resettlement

Colony residents residing in TPDDLs licensed area spread approximately over 550
sq. kms. Across North & North West of Delhi. In addition, in case of natural disasters
& calamities TPDDL will take up relief work across country as appropriate.
The target communities of CSR programs/projects would be underprivileged,
socially and economically marginalised men, women, adolescent, school going
students, school drop outs, SC/ST, old age individuals, orphans and differently abled
individuals.

Sectors & Issues

CSR

programs/projects focuses on following sectors & issues as per sectors

mentioned in Schedule VII read with Section 135 of Companies Act, 2013:
In addition, we will respond to any disasters, depending upon where they occur and
our own ability to respond meaningfully.

CSR Plan of TPDDL also includes:

Taking up new projects specified in Schedule VII read with section 135 of the
Companies Act, 2013 and rules made thereunder and any amendments made thereto
from time to time.
Note: Surplus arising out of the CSR programs/projects or activities shall not form
part of the business profit of the Company.
Implementing mechanism
CSR programs/projects would be primarily implemented by proficient NGOs. InHouse CSR team would look after the identification, planning, budgeting, monitoring,
evaluation and reporting of the CSR programs/projects.

Monitoring & Review Mechanism

TPDDLs CSR programs/projects have clearly defined targets, no. of beneficiaries and
timelines by which the deliverables of projects are measured & monitored. The
working mechanism, deliverables & outcome of the programs are detailed in the
contract agreement of the implementing partner.
The monitoring process will cover both programme and financial reviews. TPDDL
has adopted 3 tier monitoring & review structure to ensure effective implementation
of CSR programs/projects

52

53

AWARDS AND RECOGNITIONS

54

1.

Great Places to Work 2013 : As per a Survey conducted by the Economic

Times and Great Places to Work Institute, India Tata Power- DDL has been ranked
46th amongst 100 Best Companies to Work for in India and also declared 2nd
Best in Energy, Oil and Gas Industry for the year 2013

2.

AIMAs Breakthrough Innovation Award 2013 : Tata Power Delhi

Distribution Ltd. (TPDDL) was conferred this award for its Last Mile AT&C
Loss Reduction in JJ Clusters by CS intervention, This award is instituted by All
India Management Institute and conferred for breakthrough innovations.

3.

Best Performing Private Discom Award 2013 : Tata Power Delhi

Distribution Limited has won the Power Line Best Performing Private Discom
award at Power Line Award 2013. The Powerline Awards recognize excellence
and outstanding performance in the Indian power sector in the fields of
generation, transmission and distribution.

4.

IPPAI Award for Most Improved Power Distribution Company

(DISCOM) 2013 : Tata Power Delhi Distribution Limited, has been conferred
the Most Improved Power Distribution Company Award for 2013 by Independent
Power Producers Association of India (IPPAI),This is a non-partisan awards
program to recognize the contribution of organizations, Indian States and State
Electricity Regulatory Commissions who have significantly contributed to the
development of the power sector in India.

5.

Safety Innovation Award : Tata Power Delhi Distribution Ltd. (TPDDL) has
won the prestigious Safety Innovation Award for the Year 2013 for the fifth
consecutive year. This award has been instituted by The Institution of Engineers
(India) under the aegis of Safety & Quality Forum

6.

12th Annual Greentech Safety Award 2013, Gold Category: Tata

Power Delhi Distribution Ltd. (TPDDL) has won the Gold Award in Public Utility
Services Organisation Sector at the 12th Annual Greentech Safety Award 2013.
This Award is in recognition for the excellence, best practice and innovation in
Fire, Safety Management

7.

National Award for Meritorious Performance (2008-09): Tata PowerDDL won the National Award for Meritorious Performance 2008-09. Tata PowerDDL was presented the silver award by Shri Sushil Kumar Shinde, Hon'ble Union
Minster of Power. The award, instituted by the Ministry of Power, Government of
India, was conferred in recognition of Tata Power-DDL's outstanding performance
in power distribution.

55

BOUQUET OF SERVICES
TPDDL is a unique name amongst firms providing consultancy in the power sector.
Building up on its four-fold strengths of being a Power Distribution utility, Change
Management expertise, Idea Capital and IT& Technology Expertise, TPDDL has been
offerings services laden with domain experience as well as a consultant's
vision.TPDDL's hands on experience of successful implementation and regular
maintenance enable it to act as a Project Management Consultant and handhold
utilities from the cradle to youth to embrace state-of-art technologies.

56

TPDDL's success story has led to an influx of progressive measures in other power
sectors in India as well. Encouraged by the wholesome transformation witnessed in
TPDDL regions, other sectors such as water distribution, retail gas supply, solar
rooftop generation, etc. have embarked on producing the change in their business
areas. TPDDL, harnessing its pioneering presence and pool of exceptional brains, has
also been involved in assisting these firms on their path to excellence.

57

MAJOR PLAYES OF POWER COMPANIES

Major Power Generating companies

NTPC

National Hydro Electric Power Corporation

JINDAL

TATA Power

RELIANCEBSES

ADANI Power Limited

Major Power Transmission companies

Power Grid Corporation of India Limited

Power Link

Delhi Transco Limited

BBMB

Major Power Distributing companies

Tata Power

Torrent Power

BSES

BRPL

India possesses a vast opportunity to grow in the field of power generation,

transmission, and distribution. The target of over 150,000 MW of hydel power
germination is yet to be achieved. By the year 2013, India requires an additional
100,000 MW of generation capacity. A huge capital investment is required to meet
this target. This has welcomed numerous power generation, transmission, and
58

distribution companies across the globe to establish their operations in the country
under the famous PPP programmes. The power sector is still experiencing a large
demand-supply gap. This has called for an effective consideration of some of strategic
initiatives. There are strong opportunities in transmission network ventures
additional 60,000 circuit kilo meters of transmission network is expected by 2013
with a total investment opportunity of about US$ 200 billion.

The implementation of key reforms is likely to foster growth in all

segments:

Unbundling of vertically integrated SEBs

Open Access to transmission and distribution network

Distribution circles to be privatized

Tariff reforms by regulatory authorities

Initiatives

Allowing foreign equity participation up to 100 per cent in the power sector
under the automatic route.

Encouraging the private sector to set up coal, gas or liquid-based thermal

projects, hydel projects and wind or solar projects of any size.

Constitution of Independent State Electricity Regulatory Commissions in the

states.

Deregulation of the ancillary sectors such as coal.

Introduction of the Electricity Act 2003 and the notification of the National
Electricity and Tariff policies.

Provision of income tax holiday for a block of 10 years in the first 15 years of
operation and waiver of capital goods' import duties on mega power projects
(above 1,000 MW generation capacity).

59

Un-bundling of the State Electricity Boards (SEBs) into generation,

transmission, and distribution companies for better transparency and
accountability.

Potential

Large demand-supply gap: All India average energy shortfall of 7% and peak
demand shortfall of 12%

Opportunities in Generation for:

Coal based plants at pithead or coastal locations (imported coal)

Natural Gas/CNG based turbines at load centres or near gas terminals

Hydel power potential of 150,000 MW is untapped as assessed by the

Government of India
Renovation, modernization, up-rating and life extension of old thermal

and hydro power plants

Opportunities in Transmission network ventures - additional 40,000 circuit km

of transmission Network expected by 2013

Opportunities in Distribution through bidding for the privatization of

distribution in thirteen states that have unbundled/corporatized their State Electricity
Boards expected to take place Over the next 2-3 years

Total investment opportunity of about US$ 200 billion over a seven year
horizon.

60

RESEARCH METHODOLOGY
Secondary data , is data collected by someone other than the user. Common sources
of secondary data for social science include censuses, organisational records and data
collected through qualitative methodologies or qualitative research
Secondary data analysis saves time that would otherwise be spent collecting data and,
particularly in the case of quantitative data, provides larger and higherquality databases that would be unfeasible for any individual researcher to collect on
their own. In addition, analysts of social and economic change consider secondary
data essential, since it is impossible to conduct a new survey that can adequately
capture past change and/or developments.
The data required was collected in the following ways:

Appointment was taken from a few employees

Data was gathered on the basis of the appointment.
Further research was based on the data collected from books, journals,
documents.

Research methodology used is systematic, theoretical analysis of the methods applied

to a field of study. It comprises the theoretical analysis of the body of methods and
principles associated with a branch of knowledge.

61

FINDINGS AND INFERENCES

TPDDL is following all the statutory compliances under various tax laws like
Income Tax, Service Tax, DVAT and CSAT.

The company is deducting tax amount at the applicable tax rates under various
tax laws and depositing account on or before the due date.

TPDDL is using SAP ERP system and before depositing the tax amount it is
checked by the various levels of concerned staff by using required reports
generated by SAP system.

Tax is submitted online and not manually.

All the returns are filled timely.

62

DATA REDECTION, PRESENTATION AND ANALYSIS

First Quarter Financial Year 2014-2015
(Section 194 A)
Total number of deductee

13000

Total Interest paid

19 Crores

TDS deducted

65 Lakhs

PAN Available

5900

TDS on PAN Available

42 Lakhs

Interest on PAN Available

17.8 Crores

The table presented above represents the data for First Quarter for the financial year
2014-2015 under section 194 A. The data shows that the total number of deductee
involved are 13000 and the total interest paid by all is Rs. 19 crores. The total TDS
that has been deducted is Rs. 65 lakhs. The number of deductees that have furnished
their PAN are around 5900 and the remaining are those who have not furnished their
PAN are 7100.
The amount of TDS on number of PAN available is Rs. 42 lakhs which means that
that TDS on non-availability of PAN is 23 lakhs. Interest on PAN availability is Rs.
17.8 Crores so the remaining amount indicated the interest on non availability of
PAN ie.1.2 Crores.

63

First Quarter Financial Year 2015-2016

Section 194 A

Total number of deductee

13300

Total Interest paid

30 Crores

TDS deducted

2 crores and 50 lakhs

PAN Available

6200

TDS on PAN Available

2 crores and 25Lakhs

Interest on PAN Available

28 Crores and 25 lakhs

The table presented above represents the data for First Quarter for the financial year
2015-2016 under section 194 A. The data shows that the total number of deductee
involved are 13300 and the total interest paid by all is Rs. 30 crores. The total TDS
that has been deducted is Rs. 2 crores and 50 lakhs. The number of deductee who
have furnished their PAN are around 6200 and the remaining are those who have not
furnished their PAN are 7100.
The amount of TDS on number of PAN available is Rs. 2 crore and 25 lakhs which
means that that TDS on non-availability of PAN is 25 lakhs. Interest on PAN
availability is Rs. 28 Crores and 25 lakhs so the remaining amount indicated the
interest on non availability of PAN ie.1.5 lakhs

64

Number Of Deductee
13350
13300
13250
13200
13150

Number Of Deductee

13100
13050
13000
12950
12900
12850
Year 2014-15

Year2015-16

Figure 1.5
Inference from the above graph:
The number of deductee has increased in the financial year 2015-16 by 300.

65

Interest
350000000
300000000
250000000
Interest

200000000
150000000
100000000
50000000
0
Year 14-15

Year 15-14

Figure 1.6
Inference from the above graph:
The above graph depicts that the interest paid has been increased during the financial
year 2015-2016 by 11 crores.

66

TDS Deducted
350000000
300000000
250000000
Interest Paid

200000000
150000000
100000000
50000000
0
Year 2014-15

Year 2015-16

Figure 1.7
During the financial year 2015-16 the TDS deducted is more as compared to the
previous financial year .

LIMITATIONS
67

Having not studied taxation in depth before, made it at times difficult to

understand concepts .
As the subject of taxation is so vast, it is difficult to understand whole
taxation in a short duration of training period.
At times, the employees were busy with their own work which made it a bit
difficult for me to get my doubts cleared.

Limitations of the Indian Taxation System:

Bias in incidence of taxes: As per the indirect taxation enquiry

committee, The burden of the urban households was distinctly higher than the
rural households in the corresponding expenditure class. Urban population is
taxed far higher than the rural rich.

Complexity and corruption: A provoking feature of the Indian tax

system is its complexity. Both direct and indirect tax laws are complex.
This provides enough scope for avoiding and evading taxes .

Imbalance in tax system: Excessive emphasis on indirect taxes has

resulted in the glaring imbalances of nearly 100% citizens affected by
indirect taxes but hardly 1% of the population coming under the purview
of direct taxation.

Lack of built-in elasticity: Income from taxation does not increase

automatically in India in proportion to increase in National income. Hence, the

government is compelled to increase taxes every year to maintain a constant tax
income ratio.

Squandering away of resources: Colossal amounts of taxes realized

are spent on civil administration and defence.Vote Bank Politics result in

populist schemes subsidized by the governments. As a result, resources for the
rapid economic development of the country are always lacking.

Multiplicity of taxes: Taxes by Union Government, State Governments

and the local governments have resulted in difficulties and harassment to the
tax payer. He has to contact several authorities and maintain separate records
for each of them.

Dominance of Indirect taxes: Central government revenues from

indirect and direct taxes were in the ratio of 74:26 respectively in 1994-95. In
the same year the ratio for State government was 83:17. It is well known that
indirect taxes are more burdensome to the poor than the wealthy.

RECOMMENDATIONS
68

Training regarding how to use the SAP software should be given to employees
.

Employees should be educated on how to plan their tax filing and reduce their
tax liability.
Since tax rules and regulations change almost year, employees must be made
equipped with knowledge to ensure they are up to date with the latest
amendments made.

Employees must be helped on keeping the necessary documents ready for tax
filing.

For Tax Collection

Focus resources on improved auditing, processes, tools.

Use simple segmentation to identify larger collection opportunities
Ensure regular updates to the taxpayer registry
Introduce account managers to oversee large taxpayers
Use electronic channels for simple transactions
Simplify the tax system to encourage formalization
Analyze opportunities to close tax loopholes

CONCLUSION
Taxation is the process by which the government imposes charges on citizens and corporate
businesses. The charges collected by the government are used to fund different government
projects that would in the end benefit the citizens of the country as a whole. The taxation process
can benefit both the society and business as a whole. The government allocates the money
collected from the taxpayers to different areas of the country. The areas picked are rural areas.
Some rural areas may have resources that might be beneficial for both the country and its
economy. Therefore, the government would allocate part of the tax money to provide the essential
services required and to improve the standards of such places.

69

Tax should be paid by all those who have to

Awareness as to why should one pay tax should be spread
Best possible methods of tax collection and payment should be used.

BIBLIOGRAPHY
Reference Books:

TPDDL manuals
TPDDL tax guru
TPDDL tax patrika
Systematic Approach to Income Tax , Service Tax and VAT by Girish Ahuja

Websites:
70

www.wikipedia.org
www.incometaxindia.gov.in
www.tatapower-ddl.com
www.taxguru.in
www.tatapower.com

71