IT massive shock to Telangana Government

Income Tax department had given a shock to Telangana government by taking away the pending 1200 Crore from the state’s account with Reserve Bank of India. United Andhra Pradesh was levied 3100 Crore as Income Tax on Liquor Sales. This issue is going on for years but the then Andhra Pradesh government evaded the tax by telling that since it is a government corporation it need not pay taxes.

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Recently the courts have decided it in the Income Tax department’s favour. Subsequently it is decided that Telangana had to pay 1200 Crore while AP’s share is 1900 Crore. However Telangana government did not intiate any talks with IT department regarding the same. And so the department had recovered the money through RBI.

On the other side, AP government may also receive a notice regarding the same in couple of days. If the entire 1900 Crore is withdrawn from AP’s account, it will be a huge problem to the debt ridden state. AP government is likely to cut a monthly remitting deal with IT department regarding this.