The Income Tax Department has recently stepped up vigilance in identifying all those people and organizations planning to defraud the department of taxes through fake claims to refunds.
Some taxpayers in an attempt to minimize the total amount of tax they pay provide wrong or artificially inflated receipts, like house rent receipts, donations, or exaggerated expenses among others.
The worst is that, in some cases, these firms have been reported to indulge in such practices and the department has said that it will not hesitate to take the harshest action on anyone found wanting in this regard.
Concentration on Refund Claims of Higher Risk
For the financial year, the Income Tax Department proposes to examine high risk refund cases for the financial year 2023-24 and the assessment year 2024-25. This verification process will show the would-be fraudsters who are out to claim huge tax rebates in error, perhaps as individuals or as in a coordinated syndicated fraud.
Reviewing such things like multiple refund claims within the same email address or phone number is among the measures the department is taking to check fraud.
It has further pointed out some issues such as preparation of fake house rent receipts or amounts on which tax deduction is made under Section 80 G etc. Authorities are also keen to the situations that taxpayers claim higher expenses in order to have lower taxable income.
Standard operating procedure (SOP) issued
To organize these probes, the Directorate of Income Tax Systems which comes under the Ministry of Finance have come up with SOPs. These guidelines have been communicated to all examining officers as well as TDS charge officers, and all persons in the investigation wing.
The SOP loosely wants to assist the officials in recognizing and tackling risky refund claims thanks to TDS credits, exaggerated deductions, and bogus expenses.
Identifying Fraudulent Claims
The Insight Portal and e-filing platform are also detecting the aforementioned patterns with help of advanced technologies employed by tax officials. Any taxpayer that will be gotten through these means will be notified by the Income Tax Department to come forward and prove the genuineness of their claims. Anyone caught in this category will be strictly dealt with under the law and all fake documents will be seized from him/her.
