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With businesses facing difficulties in filing their direct tax returns, especially tax deducted at source, Clear (formerly ClearTax) has come up with online cloud-based SaaS solutions that can pre-validate data, file returns and generate TDS certificates online.
Clear TDS is the only SaaS platform that can reliably handle enterprise-level scaling. It can generate three million FVU files in 30 minutes. It also has automatic bulk PAN verification, aadhaar link verification, lower deduction certificate (LDC) consumption sync, challan consumption sync and challan verification.
It is increasingly cumbersome for businesses to comply with the direct taxation procedures introduced in recent years. For example, in a survey conducted by Clear, a major luxury vehicle manufacturer received claims worth five crore rupees over three years due to incorrect deductions.
Similarly, a large B2B trading company had two billion idle in cash during the financial year, which means a loss of working capital, the survey found.
The problems mainly related to tax deducted at source (TDS).
Archit Gupta, founder and CEO of Clear, said the government is increasingly using TDS as a mechanism to ensure that people file their tax returns on time. It tracks those who receive payments but do not pay taxes and has come up with a number of mechanisms to address this problem. The burden of TDS compliance has become more complex and businesses can no longer work with solutions that are not technology-oriented, he said.
Some TDS provisions have been added in the past. For example, Section 206 of the AA says that if one does not provide his PAN to the person paying him, he will suffer higher TDS.
Section 206 AB says that the payer must deduct TDS at higher rates than usual on payments to those who have not filed a tax return in the last year.
“And it’s not that you can take a statement from them, but you have to be able to check yourself that they’ve complied. Now you can have a number of sellers and transporters. You have to make sure they’ve filed their income tax.” It came into effect in 2021-22,” Gupta said.
Similarly, there is Section 194 Q, which asks buyers to deduct TDS from sellers whose turnover was more than Rs 10 crore in the previous year on purchases of goods above Rs 50 crore in the current financial year.
Then there is section 194R, which requires an Indian resident to deduct 10 percent tax at source on the value of any benefit or benefit received.
Even businesses have a 26AS shape. So businesses reconcile their TDS with their Form 26AS.
That’s a tremendous exercise, Gupta said, adding that Clear’s new product will help businesses address these difficulties.