Income Tax Department Investigating Overstated Exemption Claims by Salaried Employees

Many salaried individuals are getting notices from the income tax department asking questions about the claims made in their returns. The department is investigating tax returns where people are suspected of claiming unrealistic exemptions to reduce their taxes.

Large amounts were also claimed under the ‘other‘ exemptions section in tax returns. While the tax department has been looking into such cases occasionally, they are now focusing on them more seriously. The scale of these claims has led the department to think about making the tax return process more secure and accurate.

The ‘others‘ column in tax returns includes various expenses that a salaried person can claim but aren’t specifically listed in the return format. Claims for things like Mediclaim and education loans, especially by salaried individuals, are also being closely examined. The notices being sent out are for returns selected for investigation beyond the usual random checks.

Sources mentioned that there were cases related to fake returns being filed by private sector employees. The notices have been sent to these individuals asking them to revise their ITR.

Sources explain that, even with attempts to save tax using these methods, the savings are limited due to rules in the tax laws. While the amount saved may not be significant compared to overall collections, the drive is aimed at sending a clear message that fake claims won’t be tolerated.

Taxpayers often try these methods, hoping their returns won’t be selected for investigation, as only a small percentage of returns are chosen randomly for detailed checks.