As of December 31, 2024, approximately 90,000 salaried individuals from both public sector undertakings (PSUs) and the private sector have voluntarily withdrawn incorrect tax deductions totalling Rs 1,070 crore. This revelation comes from government sources following a series of search, seizure, and survey operations carried out by the Income Tax Department.
During these operations, it was found that many taxpayers had claimed erroneous deductions under sections 80C, 80D, 80E, 80G, 80GGB, and 80GGC, resulting in a reduction in the tax payable to the government. The individuals involved were employed by organizations across a range of sectors, including PSUs, large corporations, multinational companies (MNCs), LLPs and private limited companies.
The department's investigation revealed significant discrepancies between the deductions claimed under sections 80GGB/80GGC in taxpayers' returns and the actual receipts reported by the donees. Similar inconsistencies were found with deductions under sections 80C, 80E, and 80G, which raised suspicion.
In response, the department identified a list of common employers, including TDS deductors, and is reaching out to those who may have claimed fraudulent deductions. It was also found that certain individuals were misled by unscrupulous entities advising them to claim incorrect deductions or refunds.
The Income Tax Department has been conducting outreach programs with employers to raise awareness about the consequences of incorrect claims and encourage taxpayers to rectify their errors. Taxpayers are encouraged to update their returns within two years from the end of the relevant assessment year under the Income Tax Act, 1961, in order to avoid further penalties.
As part of its efforts to enhance voluntary tax compliance and reduce litigation, the department is stepping up outreach initiatives, working closely with employers to guide taxpayers on corrective measures.
With these efforts, the department reports that, as of December 31, 2024, around 90,000 taxpayers have amended their ITRs and paid the necessary additional taxes, ensuring better tax compliance for the nation.
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