Tax Department sends Notices to the Employees of Byjus for wrongful claim of TDS

The Income Tax Department has been sending notices to former employees of edtech startup Byju’s over unpaid TDS (tax deducted at the source) over the last 10 days. Several employees reported receiving similar notices via email and courier.

“I am sure over 6,000 former or current employees have received this demand notice, just as I have,” one former employee, Kaushik Kumar Lade, stated.

Kaushik was a senior sales manager at the firm. An analysis has been done of some of these demand notices, which are for the tax amount deducted by the employer from the taxpayer and submitted to the income tax department.

He stated, “I sent an email to both the HR department and management regarding this notice. They responded after around 48 hours, indicating they were working on it and will clear the payments as soon as possible.”

Employees who fail to pay their tax and provident fund deductions face hefty penalties under Indian law. While tax authorities can take action against the company for these infractions, employees must suffer the repercussions of TDS.

Employees of grounded Kingfisher Airlines had previously experienced a double whammy when they did not receive their dues and had to fight with the tax department’s allegations. However, there have been legal statements stating that employees should not face penalties.

Many Byju employees have contacted the firm for clarification on the topic, with one anonymous employee stating, “We are unsure how and where this notice will lead, as well as our liability in relation to it. Some clarification on this will benefit us all.”

The company, which is currently facing insolvency proceedings, did not react to the request for comment.

Pankaj Srivastava, the National Company Law Tribunal-appointed resolution professional in charge of asking lenders, employees, vendors, and the government to claim outstanding dues, did not respond to inquiries as of press time.

As of August 30, the government had registered claims totalling $101 million with the Insolvency and Bankruptcy Board of India. Earlier this year, a group of Byju employees filed legal action against the failing company.

It was alleged that 62 employees issued a demand notice for payment of outstanding salaries totalling more than Rs 2.3 crore. According to the report, these salaries have been unpaid since January 2024, demonstrating the depth of the company’s financial problems.