The Chairman of “National Federation of Urban Co-operative Bank and Credit Societies” (NAFCUB) Dr. Mukund Abhyankar met Chairperson of “Central Board of Direct Taxes” (CBDT), Anita Kapoor in New Delhi last week to discuss the issue of notices served through Income Tax Department to Urban Co-operative Banks (UCBs) regarding “Tax Deducted at Source” (TDS).
In the meeting, the issue of notices regarding TDS served to Urban Co-operative Banks through Income Tax Department was discussed at length. Dr. Abhyankar informed that more than 1600 UCB’s have been issued notices by Income Tax Department regarding penalty and interest, amounting to crores of rupees for not having deducted TDS since last three years. UCB’s are facing severe financial problem due to this.
Some small and medium banks will have to pay to the Government, manifold amount of their net profit earned during this financial year. Discussion was held to find a solution to this problem as an anxious Abhyankar is running from pillar to post to solve the vexing issue.
During this discussion, Anita Kapoor informed that Karnataka and Aurangabad High Court has given verdict in favour of Government in this matter, while the verdicts of High Court regarding Jalgoan Bank and other Banks is in favour of these banks. In this diverse situation CBDT is discussing with Legal Advisors and studying this problem. Till this process is complete the Income Tax Officials have been asked to ‘go slow’ on this issue.
She clarified that the “Finance Bill” has been passed which means that henceforth i.e. from June 2015, Urban Co-operative Banks will not be able to discriminate between “members” and “non-members” and hence will have to deduct TDS from all and submit the same to Government.