TCS Employees Receive Tax Demand Notices Due to IT Department Software Glitch

New Delhi, September 13 — Tata Consultancy Services (TCS) employees are facing a significant issue as the Income Tax Department has issued tax demand notices to between 30,000 and 40,000 TCS staff. The notices, which have been sent out under Section 143(1) of the Income Tax Act, are reportedly due to a software glitch within the department’s systems.

According to reports, the tax notices have been issued for amounts ranging from ₹50,000 to ₹1,00,000. The glitch is believed to have prevented the correct updating of Tax Deducted at Source (TDS) claims for the fiscal year 2023-24. The issue has been attributed to errors in the department's software, which led to discrepancies in the TDS records.

The situation has prompted TCS management to take immediate action. The company is in contact with the Income Tax Department to address the software error and resolve the discrepancies. TCS has advised its employees not to respond to the tax demand notices until further instructions are provided. The tax returns for the affected employees are expected to be reprocessed by the department, which will subsequently correct the TDS information in Forms 26AS and 16A.

TCS, one of India’s largest IT service providers, has seen a significant increase in its workforce. From April to June 2024, the company’s employee count grew by 5,452, bringing the total number of employees to 606,998.