New Delhi: As many as 90,000 taxpayers including individuals have withdrawn wrongful tax claims and have paid additional taxes following an Income Tax department drive against incorrect tax claims, a person informed about the development said.
Withdrawal of these claims have led to additional payment of about ₹1,070 crore in FY23, FY24 and FY25 up to end of December 2024, the person said on condition of not being named.
In the case of individuals, wrongful claims have been noticed in the deductions availed of for investments like purchase of insurance policies and payment for health insurance. In the case of enterprises, wrongful claims have been detected among units in Special Economic Zones, the person said.
Queries mailed to the finance ministry and the Central Board of Direct Taxes (CBDT) on Thursday seeking comments for the story remained unanswered at the time of publishing.
The person quoted above explained that during various search and seizure and survey operations by the tax department, it has come to light that various individuals were claiming incorrect deductions under section 80 of the Income Tax Act, in their tax return forms, leading to reduction of tax payable to the government.
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During investigations, it was also detected that those individuals were employees of organizations operating in diverse fields including public sector enterprises, large companies including multinational ones, LLPs and private limited companies. Also, the department’s verification showed that “certain unscrupulous elements have misguided taxpayers for claim of incorrect deduction or refunds,” said the person.
The tax department has been conducting outreach programmes with employers to spread awareness about the consequences of claiming incorrect deductions in the income tax returns and the corrective measures that can be taken by the taxpayers to rectify the errors.
Tax payers can update their return forms on payment of some additional tax rectifying the errors within two years from the end of the relevant assessment year, for assessment years 2022-23 to 2024-25. To intensify efforts in promoting voluntary tax compliance and reducing litigation, an outreach programme with employers is being launched, the person said.
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Deductions under section 80 are meant to incentivize specific investments, savings and expenditures. These reduce the taxable income and tax liability of individuals and entities. SEZ units are also offered tax relief subject to riders in order to promote exports. The effort of the department is to ensure that the benefits are not wrongly claimed.
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