Cleaning process by department before ITR season:

 

The Income Tax Department has raided over 200 premises across India. The objective was to uncover a network of intermediaries assisting in filing fraudulent Income Tax Returns (ITRs) of salaried employees by misusing provisions for deductions and exemptions.

The investigation has revealed that fraudulent refunds are typically claimed by salaried employees by fabricating evidence for deductions under the following sections of the Income-tax Act, 1961:
Section 80C – False claims for investments in life insurance premiums, PPF, ELSS, tuition fees, etc., without actual payments being made.
Section 80D – Submission of fake medical insurance premium receipts.
Section 24(b) – Bogus interest certificates for housing loans from non-existent or related parties.
Section 10(13A) – Fake rent receipts to claim HRA exemption without actual rent payments.
Section 80E or 80EEA – Claims for interest on education/home loans which were never availed.
Section 80DDB – Needs certified medical documentation; harder to fake. Even then, salaried assessees have claimed deduction under this section!
Section 80G – Donations are cross-verified; and are traceable via online systems.
Section 80GGC – 100% deductions are allowed for donations to recognized political parties. Many recognized political parties were earlier investigated, if they were accepting donations and returning cash to the donees. As a next step, donees are now being investigated/ assessed in respect of these purportedly fictitious donations.
HRA (Section 10(13A)) — It is one of the most misused exemptions. Fake rent receipts (sometimes in parents’ names) are often used to claim deductions even when the employee stays in their own house.

Nearly 40,000 taxpayers have voluntarily withdrawn false claims totaling over ₹1,045 crore. In case fraudulent deductions have been claimed, it is advisable to voluntarily pay the additional tax liability to avoid further interest liability.