Incorrect claim of deductions/exemptions- Excess claim of refunds - Advisory to employees

M. ANIL KUMAR M. ANIL KUMAR I.R.S Chief Commissioner of Income Tax

Web-mail: Email: Tel (0):0866-2478481, Fax: 0866-2477062

F.No. Refunds/PCIT/V/JA/2023-24

Tom B. Raja Gofal Dy Director Treasury 107/2023

Indian government

Government of India Ministry of Finance

Income Tax Department Income Tax Department

Ministry of Finance Moghalrajpuram, Vijayawada - 520010. Moghalrajpuram, Vijayawada-5200

Date: 14.07.2023

Dear Sir,

Sub: Incorrect claim of deductions/exemptions- Excess claim of refunds - Advisory to employees Request-Reg. The Income-tax Department has taken several initiatives to ensure ease of

compliance for taxpayers while discharging obligations cast upon them by the Income-tax Act. In particular, the Income-tax Return Form has been greatly simplified, with taxpayers being able to submit their returns online in a seamless manner. The Income-tax Department reposes trust in its taxpayers, accordingly while filing IT Returns, taxpayers need not submit copies of supporting documents in respect of deductions / exemptions claimed by them in their Returns.

2. At the same time, Income-tax Department also monitors the correctness of returns filed by taxpayers, including the eligibility of deductions / exemptions claimed by them. It has been reliably learnt that in the twin states of Andhra Pradesh and Telangana, a large section of salaried employees have been lured into claiming refund by filing false IT Returns by exaggerating their claims of deductions / exemptions. Many such employees have claimed refunds as high as 75-90% of the TDS deducted by the Accounts section of the organization they work in.

3. Our monitoring exercise and field surveys have revealed that a significant number of employees working with your organisation have taken refunds based on deductions / exemptions claimed which appear to be suspicious / incorrect. These claims of deductions and exemptions are currently under verification by the Department.

4. In light of the above facts, the Department urges your goodself to advise all the employees of your organisation to verify the correctness of their claim of deductions exemptions for IT Returns filed for AY 2023-24, AY 2022-23 and AY 2021-22. In case any incorrect deduction / exemption has been claimed, the employees may be advised to file updated / revised returns to rectify the wrong claim. This opportunity of voluntarily coming clean and filing updated returns will not be available after the case of the taxpayer is selected for scrutiny and notice is issued to him.

Truth always triumphs

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