The top tax official in Jammu and Kashmir and Ladakh warned the Finance Department that employees who wrongly claimed too many tax deductions would face strict consequences. The officials revealed that these employees could be taxed heavily, up to 200 per cent of the evaded tax, and also face interest charges.
The officials told the Finance Department that many employees from different departments, such as education, health and police, claimed too many deductions on their taxes under different sections of the Income Tax Act. These deductions were not suitable for their income.
Warning of the consequences, the officials also highlighted that such employees may even be prosecuted and imprisoned for up to seven years. Furthermore, their bank accounts will be seized to recover the wrongly-claimed money. Non-compliance with the department’s orders can also lead to a penalty of Rs 10,000 per case.
To avoid these consequences, the defaulting employees should file updated tax returns and correct their mistakes within a specified time frame, as advised by the tax official. Immediate action is necessary to prevent further penalties or scrutiny.
If the corrected tax returns are filed within a year from the end of the financial year, the employees will have to pay 25 per cent of the total tax and interest as additional tax. If filed within 12 to 24 months, they will have to pay 50 per cent.
Moreover, the Finance Department’s principal secretary directed all department heads to ensure that the defaulting employees file updated tax returns and correct their mistakes within the given time to avoid any action from the tax department.
