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TDS Filing By Banks

admin Posted On | May 3, 2023

City Fintech Co Becomes A Game-Changer For TDS Filing By Banks

The income tax department processed over 100 crore returns during the last financial year, out of which 40 crore were filed through one company in Nagpur, says its promoters.

Promoters of Figment Global Solutions Private Limited boast to be among the only two companies in the country that qualify to bid for providing tax compliance solutions to some major PSU banks. The company, which remained away from the limelight, located right in the city, started in 2012. The company was in focus on Saturday as it bagged the best service provider award by Vidarbha Industries Association in 2022.

It was a flaw in the existing system in which a trio of chartered accountants from the city saw the business opportunity. “Earlier, the system through which returns were processed was too lengthy. Due to this, in 2005 a lot of major PSUs including the State Bank of India (SBI) and the Life Insurance Corporation (LIC) got hefty demands for TDS from the income tax department. This was not because of non-payment of taxes, but because of errors in filing. Since there was a huge backlog, a hefty demand of earlier years was generated in one go during 2015.” Said Harsh Mehadia, a founder.

“At this time, we approached the banks and suggested our system of centralized filing. It finally took off in 2018.” He says.

Figment Global at presents clocks a turnover of Rs150 crore, out if which Rs50 crore is from banking behemoth SBI alone.

Himanshu Chordia, a chartered accountant and one of the founders, says Figment Global has revolutionized tax compliance in banks. Tax is deducted at source (TDS) by banks from the interest income of customers. “As TDS deductor, banks have to file branch-wise returns, which was not only a lengthy process but entailed a major cost.”

“Our company has both charted accountants and engineers. Both fused the knowledge of taxation and technology to bring out a centralized solution,” said Chordia.

Now SBI uses the centralized system, which has led to a major cost reduction for the bank. Figment Global offers services to SBI, Indian Bank, PNB and around two dozen regional rural banks (RRBs), he said.
The SBI deal happened in 2008. Lately, the company has got a similar order from Tata’s for handling the tax on dividends distributed to shareholders. Technology has made it easier to handle the huge number of shareholders and tax compliance related to dividends, says Chordia.

Another order the company got lately was from Mercedes Benz for a centralized system related to client’s details and that of a listed company SRF, he says. Sapan Jain is the third founder of the company.HCLTech’s market share among highest 10 Global MSSPs, highest among Indian Origin Providers