Tax experts have advised against doing this and said that the Income Tax Department is now scrutinizing such receipts more strictly than before.
If someone close to you is trying to get undue income tax exemption by submitting fake receipts showing higher rent or by showing huge donations to charitable institutions, NGOs or political parties, then warn him. Tax experts have advised against doing this and said that the Income Tax Department is now scrutinizing such receipts more strictly than before.
Experts are saying that in many such cases, the Income Tax Department has imposed a penalty of up to 200 percent on the evaded tax, due to which such an act is proving very costly for the taxpayers. Chetan Daga, founder and chartered accountant (CA) of Advantage Edge Consulting, said, ‘This year taxpayers need to be more careful. The government has been following the policy of trusting taxpayers. Income tax returns no longer have to be filed on paper and people do not have to attach proofs for exemptions and reductions in taxable amount. Returns are being processed quickly and people are getting their refunds quickly. But the policy of trusting taxpayers is proving costly for the government as some dishonest people are taking advantage of it.’ Daga said that the Central Board of Direct Taxes (CBDT) has caught many such cases of donations where donations were made through banks and later the money was withdrawn in cash. There are also cases where donations were only shown and not given. He said, ‘This happens more in donations given to small political parties and not with big parties.’ Referring to rent allowance, he said that to get income tax exemption, either an unregistered rent deed is shown or the rent amount is shown very inflated.
Tax experts warn that such acts can now be easily caught. Abhishek Rastogi of Rastogi Chambers says, ‘The tax department has got new tools which collect information from banks, employers and other places. They use advanced software and artificial intelligence to spot any anomalies. Even small claims of exemptions can be questioned if they do not match the income or lifestyle of the person.’
The government has extended the date for filing returns for income tax payers to 15 September this time. According to the data of the Central Board of Direct Taxes, in the last four months, 40,000 taxpayers have revised their income tax returns and withdrawn fake claims worth about Rs 1,045 crore.
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