Unlike in the past when settlement of income tax arrears used to take a long time due to prolonged disputes, payment of Goods and Services Tax (GST) and Tax Deduction at Source (TDS) has become more stringent.
The payment should be done promptly and on time and disputes any, would be looked into only at a later stage.
So, any monetary transaction from person to person or place to place without proper documentation comes under intense scrutiny by the tax authorities.
Previously, only income tax raids were a concern, but now there are many other agencies like GST and TDS which have regulatory checks
If any discrepancies are found, the authorities readily impose penalties and award punishments. Particularly, the penalties are very hefty and severe.
According to reports from Tollywood, at least two producers are facing massive tax penalties.
One producer is said to be struggling, especially after a movie he made with a young hero caused financial troubles for both buyers and himself.
Although he is now working to clear things up and release a new film, it is learnt he has failed to account for or pay taxes on certain amounts, resulting in a notice from the concerned department with a penalty running into tens of crores. He is now working to resolve the matter.
The other producer, who is relatively sound financially and involved in a profitable venture with a big project slated for 2025, is also reportedly facing a heavy penalty due to discrepancies in accounts, again amounting to crores of rupees. He is also struggling hard to settle the dues.
In the past, whenever the authorities levied penalties, people used to approach courts to challenge the same and the tax authorities used to have tough time in realising the penalties.
But now, the approach has changed — the amount must be paid first, and then the person can approach the court.