HYDERABAD: The Income Tax Department has taken several initiatives to ensure ease and encourage voluntary compliance, Principal Chief Commissioner of Income Tax, AP and Telangana, Mitali Madhusmita said on Friday.
Speaking to media persons here on the “Issue of Suspicious Refunds being claimed by certain taxpayers,” she said that the Income Tax returns have been simplified and the process of e-filing has been made seamless.
The department reposes trust in its taxpayers, as no proof of deductions/exemptions claimed is required to be uploaded while filing the returns. Further, the returns are also processed expeditiously and refunds are automatically credited to the bank account of the taxpayer.
The principal chief commissioner stated that the department also monitors the correctness of returns filed by taxpayers, including the eligibility of deductions and exemptions claimed by them.
She said that during such an exercise, it has been found that a large number of salaried taxpayers of Andhra Pradesh and Telangana have claimed deductions/exemptions wrongfully and obtained refunds based on them.
The officer revealed that many of the assessees worked in government departments, PSUs and prestigious IT companies, and of them, a large number worked with companies based outside Andhra Pradesh and Telangana but have PAN based in Andhra Pradesh/Telangana.
Many taxpayers have claimed refunds of as high as 75 per cent to 90 per cent of the TDS deducted by the employer. The refund claimed at the last assessment year was 84 per cent and before that year 34 per cent she stated that the officials are verifying the assessees’ deduction by randomly who claimed with fabricated bills.
She said that field inquiries suggested a trend that gullible employees get lured into claiming such wrongful refunds on the advice of intermediaries/peers, without realizing the consequences thereof. Recent surveys on consultants/intermediaries were conducted, in which incriminating evidence about such malpractice has been found. The persons admitted to having filed a large number of returns with bogus deductions/exemptions and have got refunds of substantial amounts for their clients.
The officer also said that under the Income-Tax Act,1961 there are stringent consequences of misreporting of income and claiming wrongful deductions. The consequences include interest @ 12% per annum, penalty @ 200% of taxes and prosecution which may entail imprisonment.
Given the gravity of the situation, she said that the department urged all such taxpayers of Andhra Pradesh and Telangana States to reconsider their claim of deductions and exemptions made in the returns filed for AY 2023-24, AY 2022-23 and AY 2021-22.