Why thousands of TCS employees have received tax demand notices
What's the story
A significant number of Tata Consultancy Services (TCS) employees have received tax demand notices from the Income Tax Department.
The notices, which stem from alleged inconsistencies in their tax deduction at source (TDS) claims, are believed to be due to a software error that prevented these claims from being updated on the department's portal.
The company has advised its employees not to pay the demanded amount until further instructions are provided.
Notice details
Tax demand ranges from ₹50,000 to ₹1.5 lakh
The tax demand in the notices issued to TCS employees varies from ₹50,000 to ₹1.5 lakh.
The number of employees affected by this issue is estimated to be between 30,000 and 40,000.
The amount demanded in each notice is determined by the employee's seniority level within the company.
TCS has assured its workforce that those who received a notice will get a rectification intimation soon and are not required to pay any demand amount at this time.
Company response
TCS assures rectification of tax discrepancies
In an internal email, TCS informed its employees that once the tax authorities issue rectification intimations, the discrepancies should be resolved.
The company also stated that there might have been errors in processing the filed returns by the authorities.
It further clarified that after reprocessing, TDS would align with Form 26AS issued by the department and Form 16A provided by TCS.
Employee guidance
Employees advised to consult tax advisers
TCS has suggested that employees who are unsure about how to proceed should consult their tax advisers or contact the company for guidance.
According to Prabhakar KS, founder and CEO of Shree Tax Chambers, TCS has taken up the matter with the authorities and returns are being reprocessed.
He also mentioned that upon rectification, employees should expect a 'rectification order' under Section 154 of the I-T Act, explaining why the mistake occurred in the first place.
Expert opinion
Experts suggest possible withdrawal of demand notices
Experts believe that the issue could be resolved without employees having to take any action, as the department might withdraw demand notices on its own.
If not rectified within a month, employees can file a reprocessing request through the income-tax filing portal, suggested Mumbai-based chartered accountant Chirag Chauhan.
Prabhakar KS also stated that if such rectification reduces tax refund or increases tax liability for an assessee, the income tax authority will have to provide an opportunity to hear his/her stand.