With increasing scope of transactions attracting tax deduction at source (TDS) and tax collection at source (TCS) under the Income-tax Act, 1961, many organisations face challenges in ensuring timely compliances and accurate data reporting with the tax authorities.
Additionally, with the Government’s focus on such transactional taxes, multiple levels of data collection and extensive use of data analytics to identify anomalies, organisations often take significant time to provide explanations to such anomalies due to lack of adequate governance and well-defined processes.
It is important for tax and finance functions to report accurate data, comply on a timely basis and reconcile data reported to multiple authorities.
Our technology enabled end-to-end managed services solution facilitates an effective and detailed TDS/TCS compliance process management (other than salary payments) for clients, comprising of the following:
- Process improvement – fixing data gaps at source
- Application of our experience - leveraging our tax knowledge in relation to evolving TDS/TCS laws
- Technology deployment - to automate certain routine processes and to improve accuracy
- Strong governance - through data analytics.
Value add and potential benefits
Our key proposition is customisable to client needs and requirements and entails the following (illustrative):
- Sensitising ERP for TDS and TCS provisions (where possible) to reduce adjustments and reconciliations outside ERP
- Automated PAN verification of vendors through TRACES
- Automated Section and tax rate determination using well defined codes
- Automated tracking of lower deduction certificate (LDCs) along with dashboards for its utilisation
- Tech enabled tracking of TDS on advances and its subsequent utilisation
- Process to mitigate double deduction of TDS on invoices relating to year-end provisions
- Tech enabled workflows for preparation of TDS and TCS return and subsequent revisions, if any
- Automate preparation of clause 34(a) of Tax Audit Report at source (i.e within ERP)
- Dashboards for reconciliation between books and TDS returns to support any variances
- Automated bulk e-mailing facility for providing TDS/TCS certificates
- Advising on TDS/TCS implications on complex transactions/undertaking a diagnostic health check.