Refund Scam: IT Refund Scam of Rs.40 Crore Busted in Hyderabad; 8 Consultant under IT Scanner

The Income Tax Department has discovered a tax refund fraud of Rs.40 crore. The IT investigation wing in Hyderabad is currently looking into eight tax consultants, numerous railway and police department workers and many technological enterprises in Hyderabad and Vijayawada.

Notices of prosecution will be sent to government officials and tech workers involved, according to I-T officials. According to authorities, a criminal case will be filed with the appropriate police station.

Senior officials believe the fraud is merely the tip of the iceberg and that it might be far greater. According to authorities, the investigation will continue in the next few days to discover other consultants and workers involved in fraudulent operations.

Sources in the I-T department explained the accused scammers’ method: “The consultants fabricate bogus documents or file returns without proper documentation under sections 80CC and 80DD even though the employees were not eligible. Each consultant had submitted 500 to 1,000 IT returns.”

Citing to a senior IT official, the consultants approached the workers directly or through their agents, offering to submit their returns for a 10% fee on the refund amount. “Some employees were unaware that it was a fraudulent scheme and willingly provided their credentials in order to receive refunds in their accounts in exchange for a commission,” he claimed.

This is not the first time such fraudulent conduct has been discovered.

The Income Tax department discovered in 2017 that 200 software employees had illegally claimed refunds by inventing impairments and chronic diseases among their family members.

The central criminal sation in Hyderabad initiated an investigation and charged the consultants and workers involved. Sections 420 (cheating) and 406 (criminal breach of trust) of the IPC were charged against two tax experts.