Chennai: Vijay Faces Scrutiny in Income Tax Case

Chennai: The ongoing income tax case against actor Vijay has attracted significant attention. Political circles suggest that the DMK is reportedly planning a counter-narrative, highlighting Vijay’s alleged non-payment of taxes, in response to his vocal advocacy of honesty and justice. Vijay has repeatedly stated at public forums that he has a pending salary of ₹200 crore and questioned the need for additional funds, emphasizing that he earned his wealth legitimately.

Vijay’s Standpoint
“I have progressed on my own without cheating anyone,” Vijay asserted. “I have never survived by deceiving others, unlike some. Even with substantial wealth, how much more could I gain?” Speaking forcefully, Vijay has directly challenged the political establishment, including attacks on the family of Chief Minister M.K. Stalin. Sources claim the DMK aims to publicize the income tax issue—mainly through social media—portraying Vijay as being compelled into politics by the BJP while facing alleged tax evasion charges.

Case Details
The case pertains to the financial year 2015–16, during which Vijay allegedly failed to voluntarily declare ₹15 crore in additional income. The Income Tax Department imposed a penalty of ₹1.5 crore. The department, represented by senior advocate A.P. Srinivas, strongly opposed Vijay’s writ petition before Justice C. Saravanan, citing Section 271AAB(1) of the Income Tax Act to justify the penalty, and requested the petition be dismissed.

Vijay’s Legal Argument
Vijay’s counsel argued that the limitation period for initiating proceedings should have been June 30, 2019, not June 30, 2022. The court asked for a detailed submission by October 10, 2025. During proceedings, the department highlighted evidence seized during a raid on Vijay’s residence on September 30, 2015.

Income Details and Tax Compliance
Documents reveal that for the 2015 film Puli, producers from SKT Studios paid Vijay ₹16 crore via cheques and an additional ₹4.93 crore in cash. Only the cheque amount had TDS deducted. When questioned, Vijay admitted receiving ₹6 crore in cash and agreed to pay taxes accordingly. Over the past six years, he clarified that he did not receive any other cash apart from ₹5 crore related to Puli. To ensure compliance, Vijay agreed to declare the additional ₹15 crore (including cash transactions) and pay the corresponding tax for FY 2015–16.

For the assessment year 2016–17, Vijay filed an income tax return declaring total earnings of ₹235.42 crore, including ₹215 crore in additional income. He claimed deductions of ₹17.81 lakh for asset depreciation and ₹2.6471 crore for fan club expenses. However, the Income Tax Department rejected these claims, issuing an assessment order on December 30, 2017, fixing the taxable income at ₹138.25 crore. The order noted that, without scrutiny, Vijay would not have disclosed the additional income.

Penalty and Legal Proceedings
Accordingly, the department levied penalties under Sections 271(1)(c) and 271AAB(1) of the Income Tax Act. Vijay appealed against the assessment and certain penalties, but only the penalty under Section 271AAB(1) is under challenge in the writ petition.

On August 16, 2022, Justice Anita Sumanth stayed the collection of the penalty for a specified period, with the interim order subsequently extended multiple times. On February 21, 2023, Justice Abdul Khuddus maintained the interim order until a further hearing. The writ petition was last considered in December 2023. With long-pending arguments finally being heard by Justice Saravanan, the case has been listed again for further proceedings.