There’s shocking news for millions of taxpayers waiting for their tax refunds. An in-depth investigation by the Income Tax Department has revealed that more than 100,000 individuals made fraudulent claims to avoid taxes and receive larger refunds, resulting in refunds of over 100,000 rupees currently being withheld.
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This news is shocking for millions of taxpayers awaiting tax refunds. A recent Income Tax Department investigation revealed that more than 100,000 individuals fraudulently claimed exemptions to avoid taxes and obtain higher refunds. Consequently, many refunds exceeding ₹100,000 are currently stuck and are being thoroughly investigated.
According to sources, the Income Tax Department conducted an audit of refund-related cases, which revealed widespread irregularities. The investigation found that many taxpayers claimed donations to political parties and NGOs when filing their income tax returns, but when these claims were verified, no evidence of funds being transferred to the accounts of the respective institutions was found. In many cases, the donations were shown only on paper, while the actual funds were never deposited.
Fake receipts game
Furthermore, fraudulent receipts for children’s fees, house rent (HRA), and donations were also used to obtain tax exemptions. These cases were initially detected through an artificial intelligence (AI)-based system, after which the Income Tax Department, involving its officials, launched a detailed investigation. The investigation also revealed that some individuals had been obtaining refunds through similar fraudulent claims for the past six to seven years.
Evidence sought by sending a notice
The Income Tax Department issued notices to such taxpayers, demanding documents related to donations to political parties, NGOs, house rent, and school fees. In many cases, taxpayers were unable to substantiate their claims. Subsequently, some admitted their mistakes and filed revised ITRs, while in serious cases, the department initiated legal action.
Fines and action
According to a senior official, in cases where repeated fraudulent claims have been made, penalties and legal action are being taken. Returns from previous years are also being scrutinized. The Income Tax Department has clarified that strict action is necessary to maintain transparency in the tax system. Taxpayers have been advised to make only genuine and documented claims, otherwise they may face delays in refunds, heavy penalties, and legal trouble.
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