Income Tax department warns against rising fake claims and fraudulent practices during ITR filing; key points to note

Income Tax Department's Recent Observation

Statement: The Income Tax Department has observed a rise in fake claims during ITR filing.
Advice: Taxpayers should avoid making exaggerated claims to prevent legal consequences.

Warning Against Fraudulent Claims

Punishable Offense: Filing false claims is a punishable offense.
Refund Delays: Fraudulent claims often lead to delays in ITR refunds due to investigation.

Warning Against Fraudulent Claims

Punishable Offense: Filing false claims is a punishable offense.
Refund Delays: Fraudulent claims often lead to delays in ITR refunds due to investigation.

Types of ITR Filing Frauds

Common Types: The department has identified three major types of frauds committed by taxpayers.

False Claims for Expenses

Issue: Many taxpayers are claiming deductions for expenses they haven't incurred.
Advice: The department urges taxpayers to refrain from making such false claims.

Exaggerating Deductions

Practice: Some taxpayers exaggerate their actual expenses to increase deductions.
Warning: The department has detected many such cases and has warned taxpayers against this practice.

Under-reporting Income

Method: Taxpayers often report less income to reduce their tax liability.
Consequences: This can lead to additional tax liability once the discrepancy is discovered during investigations.

Tax Rebate Misuse

Rebate Misuse: By under-reporting income, some taxpayers fall under the rebate category and avoid paying taxes.
Employed Individuals: Particularly common among employed individuals who do not report income from other sources.

Legal Consequences

Investigations: Fraudulent claims lead to thorough investigations by the department.
Liabilities: Discoveries of discrepancies result in additional tax liabilities and penalties.

Ethical Filing

Encouragement: The department encourages taxpayers to file their returns ethically and accurately.
Avoiding Fraud: Honest filing ensures smoother processing of refunds and avoids legal trouble.

Department's Vigilance

Monitoring: The Income Tax Department is actively monitoring and catching fraudulent claims.
Responsibility: Taxpayers are reminded of their responsibility to file accurate returns to avoid punitive actions.