Bogus IT claim: Govt directs employees to avail benefits by March 31st

Police direct officials to update income Tax Returns or face action

SRINAGAR: Given the short time for corrections, the Jammu and Kashmir government has asked all the employees to avail of the benefit in case they have claimed in the correct deduction for a refund of Tax Deducted at Source (TDS) by 31st March.
During analyses by lncome Tax Department to the refunds issued in (lTR) FY 2021-22 and 2022-23 in respect of the lncome Tax Returns filed by the taxpayers of Jammu & Kashmir, it has been revealed that huge number of individual taxpayers, particularly those who derive income from salaries and which includes many government employees and police officers/officials have claimed excessive deductions/refunds under various sections of the lncome Tax Act viz. 80C, 80D, 80D0, 80DDB, 80E8, 80E, 80EE, 80G, 80GGC etc. without actually being eligible for the same.
It has also been noticed that some employees have claimed to have paid as much as 50% of their salaries as donation to political parties.
Under the Income Tax Act 1961, Tax payer has direct legal and personal responsibility for willful claims that are false. Large number of individual Tax payers particularly those who derive income from salaries have claimed excessive deductions under various sections of the Income Tax Act without actually being eligible for such deductions.
A circular in this regard has been issued by Mahesh Dass, Director General Accounts & Treasuries, Finance Department.
Various employees have claimed the refunds of Tax Deducted at Source (TDS) made by their respective DDOs, either substantially or fully. It has also been noticed that some employees have claimed to have paid as much as 50% of their salaries as donation to political parties and claimed deduction under Section 80GGC of the Income Tax Act besides claiming other deductions, leaving hardly any balance out of their salary for meeting household expenses, the circular reads.
In order to ease the compliance for tax payers, the Income Tax Department does not ask them to upload documents evidencing the deductions under various sections of the Act, as the department trusts the tax payer and the Centre Processing Unit (CPU) process the return of income and issue refunds without asking any questions/details, it added.
Returns so filed by the tax payers are analyzed subsequently, by Director General of Income Tax (Systems) and the cases of fraudulent claims / bogus refunds are selected for scrutiny and in that eventuality the tax payer has to pay heavy price that includes levy of tax and penalty upto 200% for making fraudulent claims, it added.
The Income Tax Department provides a limited window In a shape of ITR-U under section 139(8A) which provides that the tax payers can update their returns of the Income Tax by paying their actual due tax along with penalty which is 50 % of the additional tax + interest for Financial Year 2019-20 (AY 2020-21) and 25% for Financial Year 2020-21 (AY 2021-22) if the ITR-U is filed before 31.03.2023, the circular added.
The possibility of future coercive actions under the law can be mitigated through truthful and voluntary tax payment and declaration of the correct income. Given the short time available for corrections which are 31.03.2023, it is impressed upon all the Administrative Secretaries/Heads of the Department/ Drawing and Disbursing Officers of the UT of Jammu and Kashmir to convey to all the employees under their charge to avail the benefit in case they have claimed in the correct deduction for a refund of TDS, it reads.
Meanwhile, in another circular issued by M K Singh, Additional Director General of Police Hqrs PHQ J&K, all the DDOs of J&K Police have been enjoined to direct the officers/officials under their charge to update their lncome Tax Returns (lTR-U) on or before March 31, 2023, if they have claimed any bogus deductions/refunds failing which action under rules as mentioned shall be taken against them by IT Department.