CBDT: No special Income Tax Drive for HRA Reopening Cases

As part of its usual exercise of data verification, the Income Tax Department has become aware of certain instances of discrepancies between information filed by the taxpayer and information that is available with the Department. To give the taxpayers the opportunity to make amends, the Department has informed them in certain situations. On the other hand, a few social media posts and media stories have drawn attention to inquiries made by the Central Board of Direct Taxes (CBDT) regarding employee errors in their House Rent Allowance (HRA) and rent payments claims.

It is stated right away that there is no basis for any concerns regarding retrospective taxation on these topics or the reopening of instances related to HRA claims.

In certain high-value instances of discrepancy between the employee’s rent payment and the recipient’s receipt of rent for the fiscal year 2020–21, data analysis was done.

Since the concerned taxpayers had until March 31, 2024, to file an Updated Return for FY 2020–21 (AY 2021–22), only a limited number of cases required reopening for this verification.

It is emphasized that the purpose of the e-verification was to identify instances of information mismatches for the fiscal years 2020–21 alone, without compromising the others.

It is emphasized once more that there is no particular initiative to reopen these cases, and media allegations claiming the Department is reopening cases on a wide basis are entirely unfounded.