Claimed Fake Tax Deductions? I-t Dept's Ai Flags Bogus Hra, Loans Claims, Hefty Penalties Await

The Income Tax Department is stepping up its conflict against fraudulent conclusion claims pinch an fierce approach, deploying precocious AI and information analytics to sift done taxation filings meticulously. Already, much than 40,000 taxpayers person retracted fabricated entries totalling a staggering ₹1,045 crore. This important improvement forms portion of a broad strategy aimed astatine eradicating fraudulent practices, particularly those orchestrated by agents touting 'guaranteed refunds'. 

Authorities person uncovered extended maltreatment of celebrated conclusion sections, including House Rent Allowance (HRA) nether Section 10(13A), donations nether Section 80G, and indebtedness interests nether nan various 80-series sections. "There has been a monolithic misuse of celebrated conclusion sections for illustration HRA nether Section 10(13A), donations nether Section 80G, and aesculapian aliases acquisition indebtedness liking nether various 80-series sections. The department’s AI now cross-verifies these claims against TDS data, slope records, and different third-party sources," TaxBuddy, a salient taxation advisory platform, explained.

Recently, nan Income Tax Return-Updated (ITR-U) shape has seen a surge successful usage arsenic taxpayers scramble to set overstated deductions to avert penalties. The Income Tax Act lays down stringent consequences for nan erroneous reporting of deductions, including penalties reaching 200% of nan taxation owed and liking rates soaring up to 24% annually. Serious violators mightiness brushwood prosecution, pinch imaginable imprisonment for up to 7 years, peculiarly nether Section 276C for deliberate evasion. 

The intensified scrutiny has exposed respective taxpayers who person been misled by refund agents assuring ample refunds via mendacious claims. "Many taxpayers fell into nan trap of refund agents, who claimed they could unafraid ample refunds done mendacious declarations," nan TaxBuddy noted. The department's AI-driven systems promptly observe discrepancies betwixt Income Tax Returns and income information from AIS and Form 26AS. "But now, pinch AI-driven scrutiny, mismatches betwixt ITRs and income information from AIS and Form 26AS are being flagged instantly." 

The revised ITR forms for this appraisal twelvemonth require much elaborate accusation to thwart manipulation, pushing taxpayers to taxable broad documentation. "Even a mini mismatch successful this information tin trigger an automated notice," warned TaxBuddy, stressing nan value of thorough documentation. "It's nary longer capable to conscionable capable nan forms — you request to person coagulated archiving to backmost each claim." Taxpayers are cautioned against relying connected questionable refund agents and are encouraged to support exhaustive records to validate their claims. 

TaxBuddy recommends nan punctual filing of an ITR-U to rectify immoderate discrepancies and avert imaginable penalties. "Filing an ITR-U now tin prevention you from harsh penalties and prosecution later," they advised, underlining this play arsenic an optimal infinitesimal to amend erstwhile mistakes earlier authorities ramp up enforcement. "This model is your champion chance to correct immoderate errors, misreporting, aliases mendacious deductions from past returns — earlier nan section knocks connected your door." The advancements successful AI oversight signify a pivotal shift, marking nan conclusion of 'easy refunds' acquired done fraudulent means.

Published on: Jul 15, 2025 2:54 PM IST