Large number of IT, govt employees from Andhra Pradesh filed incorrect returns: Income Tax dept

economictimes.indiatimes.com:

Andhra Pradesh have claimed incorrect tax deductions and exemptions, the Income Tax department on Friday said. However, erring tax payers have been given a chance to file the correct returns. As part of their investigation, the tax officials conducted field inquiries and came to know that gullible employees were lured to claim wrongful refunds by intermediaries and peers.

«Many of the assesees work in government departments, PSUs and prestigious IT companies. It is also noticed that a large number of such taxpayers work with companies based outside Andhra Pradesh and Telangana but have PAN based in Andhra Pradesh/Telangana,» said a statement issued on Friday. The Income Tax department's surveys on consultants and intermediaries revealed incriminating evidence on these fraudulent practices.

Many of them have admitted to claiming bogus deductions and getting substantial refunds for their clients (employees and others) for commission, the statement added. A good number of these claims have amounted to tax refunds as high as 75 per cent to 90 per cent of the Tax Deducted at Source (TDS) by the employer. According to the Income Tax Act, 1961, misreporting income and claiming wrongful deductions will attract stringent actions such as a penalty of 200 per cent, prosecution which can also lead to imprisonment and others.