TCS has a TDS problem. Many employees of Tata Consultancy Services (TCS) have received demand notices from the income tax department due to discrepancies in tax deducted at source (TDS) claims. According to a report by The Times of IndiaBetween 30,000 and 40,000 employees received these notices, with tax demands ranging from Rs 50,000 to over Rs 1 lakh, depending on their seniority in the company.
The issue is believed to have been due to a software glitch that resulted in TDS claims not being updated properly on the income tax portal.
These notices, sent on September 9 under Section 143(1) of the Income Tax Act, indicated that there was no record of full payments made by employees for the March quarter of FY 2024. Chartered accountant Himank Singla also commented on the situation through his post on X, explaining that many TCS employees were receiving tax demands for FY 2024-25 due to incorrect TDS updates on the department’s portal, leading to withholding of refunds.
The notices raised concerns among employees as they highlighted discrepancies between TDS claims made by individuals and data available with the tax department.
The company sent out an internal notice advising its employees not to take any action on the demands until further instructions, The Times of India reported. TCS also informed its employees that it had notified the tax authorities and was working to resolve the issue quickly.
In a separate internal message, TCS said that the tax authorities had provided a clarification and would reprocess the tax returns, following which the TDS information would be aligned with Form 26AS issued by the income tax department and Form 16 Part A issued by TCS.
TCS added 25,000 employees in Q1 FY25
Business standard In July, TCS reported a net addition of 5,452 employees in the first quarter of fiscal year 2025, taking the company’s total headcount to 606,998. This marked the first headcount increase for TCS after three consecutive quarters of decline. In the same quarter, TCS hired 11,000 new employees, with HR chief Milind Lakkad noting that a portion of these hires were new employees whose onboarding was delayed from the previous fiscal year. He further stated that there was no backlog left from the previous year and all new hires going forward would be new employees offered positions this year.
TCS was also noted as the first company after Accenture to report a net increase in its headcount as Accenture had added 7,882 employees by the end of Q3FY24, taking its total workforce to 750,200.
First published: September 13, 2024 | 10:32 am IS
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