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TCS employees receiving income tax notices are a ‘discrepancy’, ITRs will be reprocessed: Report | Mint

Livemint

Livemint · 10m ago

TCS employees receiving income tax notices are a ‘discrepancy’, ITRs will be reprocessed: Report | Mint

Tata Consultancy Services (TCS) has stated that the tax demands sent to its employees were a discrepancy, and the Department of Income Tax will reprocess the returns. Approximately 40,000 TCS employees received tax notices, demanding between ₹50,000 and ₹1 lakh, depending on their seniority. TCS assured employees that they will receive rectification intimations and are not required to pay any demand amount. The IT major did not offer a comment on the matter but confirmed receiving a clarification from tax authorities regarding the income-tax demand notice issue.

Related News

Income Tax dept seeking shareholders’ details from some startups: Ashneer Grover

Economic Times

Economic Times · 1y ago

Income Tax dept seeking shareholders’ details from some startups: Ashneer Grover

The Income Tax department has issued notices to several startups, requesting details about their shareholders and three-year income tax returns (ITRs) of their shareholders. BharatPe's co-founder, Ashneer Grover, highlighted this issue on social media. The department invoked Section 142 (1) of the Income Tax Act, placing the initial onus on the startups to prove the identity, creditworthiness, and genuineness of transactions related to share capital/premium accounts. The department aims to determine the source of investment and its alignment with investors' ITRs.

IT dept responds to Ashneer Grover's questions over notices to startups

Livemint

Livemint · 1y ago

IT dept responds to Ashneer Grover's questions over notices to startups

The Income Tax department responded to former BharatPe CEO Ashneer Grover's concerns regarding notices sent to startups requesting three-year ITR details of their investors and shareholders. The IT department explained that Section 68 of the Income-tax Act places the initial onus on the assessee-company to prove the identity, creditworthiness, and genuineness of the transaction of the investor/shareholder. The department clarified that it aims to verify if the amount invested aligns with the investors' reported income in their ITRs and mentioned the practice of sharing PANs with the Assessing Officer.

Indian startups under I-T department scanner; gets tax notices over VC funding

IndianStartupNews

IndianStartupNews · 1y ago

Indian startups under I-T department scanner; gets tax notices over VC funding

Indian startups, particularly in the fintech sector, have been receiving tax notices from the Income Tax Department. These notices question the nature and source of the venture capital funding received by startups and lead to significant tax and penalty demands. Startups are struggling to comply with the demands for extensive documentation and face challenges in proving the legitimacy of their funding sources. Appeals against these tax demands require paying 20% of the total tax bill. These tax notices have raised concerns among startups and investors, but the startup ecosystem continues to show resilience and optimism.

Filing ITR? Here's how you can avoid a scrutiny notice from tax authorities

Livemint

Livemint · 3d ago

Filing ITR? Here's how you can avoid a scrutiny notice from tax authorities

To prevent tax scrutiny, meticulous reporting and compliance when filing returns are essential. Recently, many have received scrutiny notices, highlighting the need for accuracy and documentation. Understanding the triggers for such scrutiny can help avoid unwanted audits. Tax authorities issue these notices to ensure income is accurately reported, losses are justified, and taxes are fully paid. Compliance with existing laws is non-negotiable for avoiding these issues.

Startups Under I-T Dept Scanner, Get Tax Notices Over VC Funding

Inc42 · 1y ago

Startups Under I-T Dept Scanner, Get Tax Notices Over VC Funding

Several Indian startups, particularly in the fintech sector, have received tax notices from the Income Tax Department. The notices combine investments received with earned income, resulting in tax and penalties. Under Section 68 of the Income Tax Act, if a company fails to explain the origin and nature of its funding, the tax authorities may tax both capital and income. Startups affected by these demands must deposit 20% of the total tax demand to appeal, which may strain working capital needs. This comes as funding in the Indian startup ecosystem shows signs of picking up, with a 43% increase in funding raised in February compared to the previous month.

Domestic startups come under income tax glare for their recent funding

Economic Times

Economic Times · 1y ago

Domestic startups come under income tax glare for their recent funding

Several new economy ventures in the fintech sector have received income tax notices under Section 68 of the Income Tax Act. These notices have combined the investments received by startups with their income, leading to tax and penalty levies. In one case, a startup has been asked to pay Rs 37 crore in tax and penalty on funding of Rs 40 crore. Startups registered with the Department for Promotion of Industry and Internal Trade (DPIIT) typically do not face such scrutiny. Venture funds and AIFs have also received tax notices, causing concerns about the impact on working capital. The government had amended Section 68 of the IT Act in 2022 to seek information about the sources of venture fund infusion.

Cash may return as king as small vendors shun UPI - The Economic Times

Economic Times

Economic Times · 3d ago

Cash may return as king as small vendors shun UPI - The Economic Times

In Bengaluru, small vendors are reverting to cash payments over UPI due to GST notices, fearing tax scrutiny and potential eviction. This shift arises from confusion over digital payments being perceived as income. The GST law mandates registration for businesses exceeding certain revenue thresholds. Vendors and experts warn of misguided tax demands, as digital transactions may not fully represent business income. This trend could prompt other states to follow suit in seeking additional tax revenues.

Startup backers told to share investment information

Economic Times

Economic Times · 2m ago

Startup backers told to share investment information

The income tax department has issued notices to startup funders and promoters, requesting investment details and tax returns for three prior years, particularly for non-DPIIT-recognized startups or suspected fund "round-tripping" cases. This action, under Section 68 of the Income Tax Act, seeks clarification on unexplained income sources. Concerns arise over treating share issue amounts as income and privacy of personal tax records. However, DPIIT-recognized startups remain exempt from such scrutiny, with the focus primarily on investments from tax havens.

Mint Explainer: The budget, buybacks, and Esop taxation

Livemint

Livemint · 11m ago

Mint Explainer: The budget, buybacks, and Esop taxation

The government has proposed changes to the taxation of share buybacks in India, which will impact investors and employees, including those holding employee stock options (ESOPs). Under the budget proposal, investors would be taxed on share buybacks as dividend income, with the tax rate determined by their income slab. Additionally, employees may face higher taxes if a company buys back shares under section 68 of the Companies Act. Startups often undertake buybacks through incoming investors, and these will continue to be taxed as capital gains. The proposed changes aim to remove the current tax advantage associated with share buybacks.

TCS HR chief Milind Lakkad says linking variable pay with bonus not to punish staff, aimed to boost ‘return to office’ | Mint

Livemint

Livemint · 1y ago

TCS HR chief Milind Lakkad says linking variable pay with bonus not to punish staff, aimed to boost ‘return to office’ | Mint

Tata Consultancy Services (TCS) has linked variable pay to office attendance in order to encourage employees to return to the office. The move is not intended to punish employees, but rather to emphasize the value of coming to work. TCS has established different slabs for variable pay based on attendance percentages. Nearly 70% of employees are already working from the office due to this policy. TCS is undecided on whether to continue linking variable pay to attendance in the future. The company is using the money saved from reduced variable pay to incentivize employees who come to the office.

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