I-T Department detects new tax fraud as deductions reshuffled post-revision
What's the story
The Income Tax (I-T) Department has unearthed new cases of fraudulent tax deductions, even after taxpayers were given a chance to revise their returns. Officials say several individuals who claimed deductions for political donations under Section 80GGC of the Income Tax Act have withdrawn those claims and moved the same amounts to other deduction categories like home loan interest and education loans.
Ongoing investigation
Around 200 individuals flagged
Previously, the I-T Department had flagged around 200 individuals for high-value claims possibly linked to tax evasion worth ₹35 crore. The department had sent emails to these individuals, flagging suspicious deductions under Section 80GGC during the verification of their income tax returns for assessment years 2022-23 and 2023-24. Many of these claims involved donations to both registered political parties and registered, unrecognized political parties.
Regional impact
Telangana-Karnataka zone recorded 2nd-highest value of declared deductions
The Telangana-Karnataka zone recorded the second-highest value of declared deductions under Section 80GGC, after the Mumbai zone. Of the ₹7,124 crore in deductions declared across India, this region alone contributed ₹1,641 crore. Within this zone, 15,223 employees in Telangana were suspected of falsely claiming deductions for political donations, as per the I-T Department.
Online assistance
I-T Dept launches new facility on its portal
In light of the ongoing investigations, many taxpayers who claimed deductions under Section 80GGC of the Income Tax Act, 1961, have received notices from the I-T Department. To help these taxpayers respond to such notices, the department has launched a new facility on its portal. This feature guides taxpayers on how to respond to notices related to deductions claimed under Section 80GGC of the Income Tax Act, 1961.
Nationwide raids
Search operations against individuals, entities
Earlier this week, the I-T Department launched nationwide search operations against individuals and entities accused of facilitating fake tax deductions. The officials raided over 200 premises linked to people allegedly helping taxpayers falsely claim deductions under various heads, including political donations, tuition fees, and medical expenses. A major focus of these operations was on deductions claimed under Section 80GGC.