• Notification Date: 19-03-2024
• Notification No: N/A

Majority of Govt Employees in J&K claiming Excessive Deductions under Income Tax Act

Majority of the employees of different departments of the Government of Union Territory of Jammu and Kashmir have been found to be indulged in claiming excessive deductions under various sections of the Income Tax Act and they have been told to file updated Income Tax Returns (ITRs) and withdraw incorrect claims in order to avoid coercive action which includes attachment of bank accounts.
The Principal Commissioner of Income Tax, J&K and Ladakh vide Communication No.PR-CIT-SGR-Bogus Refunds/ 2023-24/6327 has informed the Finance Department of the Government of Union Territory of Jammu and Kashmir that majority of employees from different departments particularly Education, Health, Power Development, Public Health Engineering, Cooperatives, Sports, Tourism, Industry, Public Works and Police have been found to be indulged in claiming excessive deductions under various sections of the Income Tax Act.

These sections are 80C, 80D, 80DD, 80DDB, 80EB, 80E, 80EE, 80EEB, 80G and 80 GGC etc for which they were ineligible and such deductions were also found to be inconsonant with their income profile.

The Income Tax Department has informed that the defaulters/erring employees may face actions from the department which include selection of cases of erring employees for detailed scrutiny which will result in levying of tax along with penalty at the rate of 200% of tax evaded by them and interest on tax computed in their respective cases; prosecution under Section 276C and 277 of the Income Tax Act which may lead to rigorous imprisonment for a term ranging from three months to seven years along with fine and attachment of bank accounts of defaulters to recover the fraudulently claimed amounts from them. Moreover, non-compliance to department’s communication will also attract a penalty of Rs 10,000 for each default.
It has been further informed that in order to avoid any coercive action or harsh communication from the department, the defaulter employees may file updated Income Tax Returns under Section 139(8A) of the Income Tax Act and withdraw incorrect claims made by them and pay taxes under Section 140B of the Act.

For the financial year 2020-21 and assessment year 2021-22 the Income Tax Department has fixed March 31, 2024 as the last date to file updated Income Tax Return while as for the financial year 2021-22 and assessment year 2022-23 the department has fixed March 31, 2025 as last date. Similarly, for the financial year 2022-23 and assessment year 2023-24, March 31, 2026 has been fixed as last date to file the Income Tax Return.
Further, it has been advised that updated ITRs for the relevant years may be filed immediately without waiting for due dates as delay in filing ITRs will result in issuance of show cause notices/selection of cases under scrutiny besides payment of additional taxes.

If ITR is filed within 12 months from the end of relevant financial year the assessee will have to pay 25% of the total amount of tax and interest as additional tax while as if ITR is filed within 12 to 24 months from the end of relevant financial year the assessee will have to pay 50% of the total amount of tax and interest as additional tax.

Taking serious note of the revelations of the Income Tax Department, Principal Secretary to the Government, Finance Department Santosh D Vaidya has impressed upon all the Administrative Secretaries/ Heads of Departments to issue advisories in this regard, besides, directing the Drawing and Disbursing Officers (DDOs) under their control to ensure that the defaulter employees file updated ITR under Section 139(8A) of the IT Act and withdraw incorrect claims made by them and pay taxes under Section 140B of the Act within the prescribed timelines to avoid any coercive action from the IT Department.