Recently, the department has taken action against fake ITRs filed by taxpayers. The department has used data analytics and AI tools to identify fake or inflated claims, such as false TDS filed by refund agents. Officials have identified fraudulent claims under popular sections such as HRA (10(13A), health insurance (80D), political and general donations (80G, 80GGC) and interest on education or home loan (80E, 80EE, 80EEB).
In the last 4 months, 40,000 taxpayers have used ITR-U. Wrong deductions worth more than Rs 1,045 crore have been reversed after being detected by the Income Tax Department.
Tax experts warn that hefty penalties can be imposed for fake claims. Under section 270A, taxpayers can be charged a 200% penalty on tax payable for incorrect reporting, 24% annual interest under sections 234B and 234C and up to 7 years imprisonment under section 276C for wilful tax evasion.
The Income Tax Department has made more disclosures mandatory in the latest ITR form, including HRA calculations, insurance company details under section 80D, loan sanctions and account information under sections 80E, 80EE and 80EEA. Any mistake during this period can lead to auto-flagging, and a tax notice can be sent.
If you feel that you have claimed the wrong deductions, you can file ITR-U. This will allow you to correct mistakes, add missing income and withdraw false claims. Taxpayers are advised to avoid any third-party refund agents and instead file their returns honestly and double-check the details with their AIS or Form 26AS. The ITR-U facility is available for 5 years to help you rectify any mistakes or withdraw false claims yourself.
