Income Tax Department busts fake tax deduction racket: Check sections misused, who's under the scanner, cities and more
The Income Tax Department has launched a nationwide, extensive verification operation that targets people and organizations that enable false claims of exemptions and deductions on income tax returns (ITRs). Taxpayers are often lured into fraudulent schemes with promises of inflated refunds in return for a commission.
The recent search and seizure operations were conducted in Maharashtra, Tamil Nadu, Delhi, Gujarat, Punjab, and Madhya Pradesh, where evidence of fraudulent claims was found to have been used by various groups and entities.
Investigations have uncovered organised rackets operated by certain ITR preparers and intermediaries, who have been filing returns claiming fictitious deductions and exemptions. These fraudulent filings involve the abuse of beneficial provisions, with some even submitting false TDS returns to claim excessive refunds.
According to the Income Department press release, “Analysis reveals misuse of deductions under sections 10(13A), 80GGC, 80E, 80D, 80EE, 80EEB, 80G, 80GGA, and 80DDB. Exemptions have been claimed without valid justification. Employees of MNCs, PSUs, government bodies, academic institutions, and entrepreneurs are among those implicated.”
The tax department has emphasised voluntary compliance. Approximately 40,000 taxpayers have updated their returns in the last four months, voluntarily withdrawing false claims amounting to Rs 1,045 crore.
