CBDT Allows I-T Authorities To Share Info With Scheduled Commercial Banks

New Delhi, September 1: Apex tax body, the Central Board of Direct Taxes has allowed the income tax authorities to share information with scheduled commercial banks, aimed to ease the lenders' hassle of deciding TDS deductibility on various payments to their customers.

In a notification dated August 31, the 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.

Section 138 of the Income Tax Act empowers income tax authorities to share information or details of its taxpayers with other agencies.

Sandeep Jhunjhunwala, partner, Nangia Andersen LLP, 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,” he 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 returns of earlier years.