Expat’s TDS Circulars: Creating Collywobbles in many stomachs

As government has reinforced their regulations on Expatriate’s TDS, it has created a wave of mental
strain in official’s mind. This step, from the side of taxpayers, is quite depressing, as it has come up with
more strenuous results.

The due point of this discussion is, CBDT’s circular, which gives extra powers to taxman to take actions
against those eluding taxes. Such cases, in the eyes of prosecution is considered as criminal offenses and
give income tax officers, rights, similar to that of police. Taxpayers could only be relieved from a
magistrate’s court, in instances.

Detailing further, it says, any expat in a company, whose TDS has not been paid by the company, will
face prosecution by the revenue department. When any foreign officials joins Indian office, he first come
down to India in order to test whether they can survive the atmosphere and culture for long and on this,
he/she pays taxes to India even as his payroll is still from his base country. In the end of the financial
year, the company pays TDS to the government with interest and taxes, if applicable. As there are many
rules and regulations, it creates delay in transferring expellee’s payroll to India.

So the circular says, if there is any delay in paying TDS, unlike before, now legal actions will be taken
against them. As in before, taxpayers could get relief by paying additional taxes in order to avoid any
involvement in legal proceedings but for now, the regulation has been amended and became more rigid
to taxpayers.

Hence, if the taxman discovers any delay in payment of TDS by company or if it had happened thrice
earlier, he may commence prosecution. Further, it involves obstacle of Foreign Directors, to declare it to
thier respective stock market regulators and tax authorities.