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I-T officials pay visit to airlines’ local offices

Airlines came out with conflicting version after a recent survey of the Income Tax department over the deduction of tax deduction at source on the passenger service fee collected by them.

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Airlines came out with conflicting version after a recent survey of the Income Tax (IT) department over the deduction of tax deduction at source (TDS) on the passenger service fee (PSF) collected by them.

All airlines collect PSF per ticket (Rs225 to Rs228) which goes to the government of India’s kitty. To find out that they are deducting 10% TDS on the PSF for the year 2007-2008, IT recently conducted an internal audit at the local offices of domestic and international airlines like - AI, Jet Airways, GoAir and Emirates.

“We follow each and every rule whether it is about income tax, service tax, etc. There was a routine inspection by the IT and no discrepancy was found by them,” said the spokesperson for AI. However, Shiv Kumar, senior vice-president (finance) of Jet Airways said, “PSF is a levy imposed on the passengers by the airports in consultation with the Government of India. The airlines are merely discharging the obligations cast on them as an agent to recover this levy from the passengers and pass on to the airport operators.”

“Airport operators have also obtained a nil tax deduction certificate from the IT department on such payments,” Kumar added. The spokesperson for Emirates airline and GoAir confirmed that the IT officials visited them for the survey and did not divulge any more details.

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