New Delhi: The Income Tax Department (IT) is on alert for persons filing income tax returns with completely bogus rent receipts, unnecessary add-on claims of home loans and even fake donation slips from their relatives. A report said that the IT department is also probing unethical methods used by individuals to evade tax, which are often suggested by some experts to enhance refunds.
As per the Economic Times report, in the past it was relatively easy to dodge the tax authorities, however, at present, many may face a tough time as their returns are red-flagged by the software used by the revenue department.
Under the scrutiny of IT department
Taxpayers have been receiving notices from the IT department, ordering them to provide documentary evidence for claiming tax exemption. The notices sent are regarding exemption under section 10(13A) of house rent allowance for employed persons and allowance under section 10(14) for hiring assistants to perform official duties or deduction under section 24(B) of the IT Act for interest paid on home loan, the report cited unnamed sources said.
The Central Board of Direct Taxes keeps a proper check on its records by maintaining computerized records to match the donation details given by individuals as well as the data mentioned by political parties or charitable trusts in tax returns.
Origin Tracking
Rahul Garg, who is the managing partner of Aspire Consulting, a tax and regulatory consulting firm, told a financial magazine that India’s tax authorities are conducting a comprehensive study of taxpayers.
The study is based on ITR data along with information gathered from external sources, apart from verification of filers to verify the authenticity of claims.
Further, the IT department is demanding that taxpayers in India disclose the name, address and contact number of the chartered accountant, lawyer or IT professional who would have prepared and filed their respective ITRs.