Income Tax Fake Deductions: 40K Taxpayers Revised ITR to Withdraw Bogus claims of Rs 1045 Cr

Over the previous four months, approximately 40,000 individuals have revised their income tax returns (ITRs), taking back fake claims worth Rs. 1,045 crore. This happened after the Income Tax Department began a large-scale investigation across different parts of the country, according to the Central Board of Direct Taxes (CBDT) on Monday. This operation is aimed at catching people and agents who help others make fake tax claims.

The department has used data analytics and AI tools to identify fake or inflated claims, such as false TDS filed by refund agents. Officials have identified fraudulent claims under popular sections such as HRA (10(13A), health insurance (80D), political and general donations (80G, 80GGC) and interest on education or home loan (80E, 80EE, 80EEB).

The department said it had sent SMS alerts, emails, and held public awareness events in many places to encourage people to file correct returns on their own. Tax experts warn that hefty penalties can be imposed for fake claims. Under section 270A, taxpayers can be charged a 200% penalty on tax payable for incorrect reporting, 24% annual interest under sections 234B and 234C and up to 7 years imprisonment under section 276C for wilful tax evasion.