ITR Deadline Approaches: Tips for detecting Tax Fraud and avoiding errors on Rent Receipts

With just a few days left to the March 31 deadline, now is the time to assess your tax obligations and make any required changes. Taking these steps can help you legally save taxes, avoid penalties, and comply with Income Tax regulations.

As the March 31 deadline for advance tax payments approaches, taxpayers should begin thinking about making payments to avoid penalties and maximise tax savings.

Here’s everything you need to know before the due date, including section 80C deductions and receiving rent rules.

Why do Late Payments attract more Scrutiny?

March 31, 2025 is the deadline for paying both the mandatory advance tax and the obligatory income tax for the financial year. Mark this date because if you forget, there may be penalties and interest surcharges under sections 234B and 234C. In addition, you would be more likely to be audited by the Income Tax Department.

People who have a tax liability of more than Rs.10,000 per year after TDS deductions are classified as advance tax payer. It has been done in four installments, with the final payment due on March 31.

Poorly paid salary employees who have other sources of income, such as capital and rent, in addition to paying significant dividends, must pay these on time or face financial difficulties at the last minute.

Minimise Costs before the Deadline

Utilise Tax Deductions under Section 80C

The government allows a maximum tax-saving investment of Rs 1.5 lakh under 80 C. If you have not yet used this claim fully, try investing in:

• Public Provident Fund (PPF)
• Employees’ Provident Fund (EPF)
• Life Insurance Premiums
• Equity-Linked Savings Scheme (ELSS)
• National Savings Certificate (NSC)

By making investments before March 31, you significantly lower the income that will be taxed.

Claiming House Rent Allowance (HRA)

Employees who are earning can also deduct their House Rent Allowance. In doing so, they make several common mistakes with their rent receipts. Make sure that:

• The rent receipts match the amounts paid to the landlord.
• If the total rent exceeds Rs.1 lakh per year, the landlord’s PAN details must be submitted.
• Payments are made using traceable payment methods (bank transfer, UPI, cheque) rather than cash.
• You may be certain that getting fake receipts will add you to an income tax department’s list, which will subsequently compare rent payments to tax filings.

Income Tax Department Employed Tax Fraud Detection Strategies

When it comes to undeclared income or dubious claims, the Income Tax Department has become more rigorous. This is how they track discrepancies:

• Cross-checking official statements: The Annual Information Statement (AIS) is compared to Form 16 (TDS Certificate) to identify discrepancies between salary payments, tax deductions, and taxes paid.
• Linking Aadhaar and PAN: By linking PAN and Aadhaar, every significant value transaction is marked, which aids in the tracking of questionable transactions.
• Bank transactions and property ownership: Notices and scrutiny may be necessary owing to excessive claims of cash deposits, real estate investments, or high-value tax write-offs that lack acceptable documentation.

Checklist for the Last Day of March

• Avoid penalty by paying any late advance taxes.
• Complete health insurance investment under Sections 80C and 80D, as well as donations under Section 80G of the tax claim.
• Check the rent allowance claims again to confirm that they are not faked to evade investigations of IT department.
• Before submitting ITRs, double-check all of the information on Form 16 against the AIS to ensure that it is exact and accurate.