Pranab Naik* was puzzled when the letter first arrived. It was a show-cause notice from the Income Tax (I-T) department. Naik, who runs an eight-year-old content company, had received the notice for a delay in payment of tax deducted at source (TDS).
Naik admits there was a five-month delay in paying TDS. “It happened around 2016-17, between the demonetisation and GST period,” Naik says. The delay was on account of the company lacking working capital during this time.
“We had no money as we haven’t raised fresh capital for a while, and the working capital failure was compounded by the fact that payments were getting delayed from our clients, and in some cases, clients had just stopped working because they were trying to recover from demonetisation,” he says.