Income Tax Department Cracks Down On False Rent, Donation Receipts In ITR Filing – News18

The Income Tax (IT) department has upped its efforts to combat tax evasion among salaried individuals, reports say. The department has taken action against those who have been submitting false or inaccurate income tax returns (ITRs). Various deceitful practices, such as submitting fake rent receipts under the guise of relatives, making false donation claims, and exaggerating loan-related deductions, have been flagged and are under scrutiny. The deadline to file your ITR for the financial year 2022-2023 is July 31. It is mandatory to avoid false house rent receipts, inflated loan claims, or deceptive donation declarations, as these are tactics often used to dodge taxes.

Recently, the IT Department has implemented a software solution to detect fake documents in ITR filings. This tool will aid in identifying income taxpayers who have submitted false or fraudulent documents in their returns.

As per Times Now’s report, the IT Department has issued notices to certain taxpayers, requesting them to provide documentary evidence to substantiate their claims for tax exemption. These notices are specifically related to house rent allowance (under section 10(13A)) for salaried individuals, allowances (under section 10(14)) for hiring an assistant for official duties, and deductions (under section 24(b) of the IT Act) for interest paid on home loans. The IT Department is closely examining taxpayers’ donation claims, especially those made to religious institutions. They issued notices to 8,000 taxpayers in April for providing false information under the pretext of charity. With the new software in place, tax officials can now thoroughly scrutinise tax returns.

In the recent past, the revenue department has placed increased emphasis on scrutinising claims related to charity and political donations made during the fiscal year 2018-19 (FY19). Following Budget 2019, there was a requirement for charitable trusts to maintain a unique identification number. Consequently, only donations made to trusts with these unique IDs were eligible for Section 80G deduction starting from FY20. This move aimed to ensure greater transparency and accountability in the donation process.

Artificial intelligence helps the IT Department identify individuals with disproportionate donation-to-income ratios. Computerised records allow the revenue department to verify donation claims by cross-matching tax returns filed by charities or political parties with individual returns.