80GGC Fraud Exposed: Income Tax Raids Conducted Across India to curb Fake Political Donations

On July 14, 2025, the Income Tax Department began search operations across the country targeting individuals and entities who allegedly enabled taxpayers to receive fictitious tax deductions. Currently, raids are being conducted at over 200 locations on those allegedly allowing taxpayers to receive fake deductions under political donations, tuition fees, medical expenses, and many other headings.

A key area of focus for this operation is deductions made under section 80GGC, where taxpayers are entitled to claim a deduction for amounts donated to registered political parties. Investigators allege that multiple intermediaries have been facilitating bogus donations (in some cases, money was passed through unregistered or phantom organisations) to facilitate taxpayers in backdoor strategies to reduce their tax obligations.

The operation ventures into additional areas to pursue networks suspected of facilitating fraudulent claims related to tuition fees and medical reimbursements. The deductions were reportedly claimed without proper claims, and most often, just using the easy paperless income tax returns.

The current action is part of a larger, nationwide initiative to help ameliorate the systemic misuse of deductions under the prior tax regime. This enforcement action follows this department’s recent “NUDGE” campaign.

This operation reflects the Income Tax Department’s stricter stance against tax fraud and its continued commitment to limiting the misuse of legitimate deduction provisions.