90k salaried individuals withdraw Rs 1,070 crore worth wrongful tax deduction claims

As many as 90,000 salaried individuals, both from PSUs and the private sector, have withdrawn wrongful tax deductions claims totalling Rs 1,070 crore as of December 31, 2024, government sources said on Thursday.

During various search & seizure and survey operations conducted by Income Tax Department, it has come to notice that various individuals are claiming incorrect deductions, under sections 80C, 80D, 80E, 80G, 80GGB, 80GGC, in their ITRs, leading to reduction of tax payable to the government.

During investigation, it was revealed that such individuals are employees of organisations operating in diverse fields including PSUs, big corporations, MNCs, LLPs, Private Ltd Companies, etc, sources said. Also, most of them who claimed wrongful deductions were working in the same company.

Analysis of the information with the department showed that there is a vast mismatch between total deductions under section 80GGB/80GGC claimed by taxpayers in their ITRs as against the total receipts shown by the donees in their ITRs.

Similarly, deductions claimed under sections 80C, 80E, 80G also appear to be suspicious in nature, sources said.

They said, a list of common employers (TDS deductors) has been identified and tax department would be reaching out to as many persons as possible who are suspected to have claimed bogus deductions under section 80E, 80G, 80GGA, 80GGC and other deductions.

"Further, verification has revealed that certain unscrupulous elements have misguided taxpayers for claim of incorrect deduction/refunds," a source said.
Sources said the department has been conducting outreach programmes with employers to spread awareness about the consequences of claiming incorrect deductions in the ITRs and corrective measures which can be taken by the taxpayers to rectify the errors of omission or commission.

"Till 31st December, 2024, approximately 90,000 taxpayers have withdrawn incorrect claim of deductions amounting to Rs 1,070 crore approx in their ITRs and have paid additional taxes," a source said.

As per the provisions of Income-tax Act, 1961, taxpayers can file updated returns on payment of some additional tax rectifying the errors within two years from the end of the relevant assessment year, for AY 2022-23 to 2024-25.

In order to intensify the efforts of the department of promoting voluntary tax compliance and reducing litigation, outreach programme with employers is being launched, sources added.