Beware before filing their income tax returns.

Salaried taxpayers under scrutiny for rent, home loan frauds in INCOME TAX Returns. Unfortunately, some of them use unethical tactics, like presenting fake rent receipts from close relatives, inflating claims on home loans, creating false donation records, and employing other doubtful means to minimize their tax obligations and secure larger refunds.

Previously, such practices often went undetected, enabling many to escape the scrutiny of the tax authorities. However, the scenario has evolved, and individuals may not be as lucky anymore, as the income tax department employs advanced software to identify suspicious returns.

Based on the Economic Times report, the Income Tax (I-T) department has taken a proactive approach to address fraudulent practices related to tax exemptions and deductions. They have issued notices to taxpayers, specifically targeting claims for exemptions like house rent allowance (section 10(13A)), allowances for hiring a helper (section 10(14)), and deductions for home loan interest payments (section 24(b)) for the assessment years 2022-23. These notices have been issued under section 133(6) of the I-T Act, allowing tax assessing officers to request specific transaction details.

The authenticity of claims in Income tax returns

To verify the authenticity of claims, the tax department is conducting comprehensive profiling of individuals using data from ITRs and various sources. They are leveraging data mining, analytics, and information flow to uncover deceptive practices.

The Central Board of Direct Taxes (CBDT) has directed field officers to make optimal use of technology to expand the tax base. Engaging in fraudulent practices, as well as assisting in them, could lead to potential prosecution under the I-T law.

Given the potential consequences, individual taxpayers are urged to exercise caution and ensure their claims are legitimate when filing their returns. Adverse actions, such as prosecutions, could have serious ramifications, including the risk of job loss as many employers take such matters seriously. The government also aims to simplify the individual tax regime by offering lower rates and fewer exemptions and deductions, similar to the regime implemented for corporates in recent years.

Beware before filing their income tax returns.

Dead Line For Income Tax returns
Beware before filing their income tax returns.

The Income Tax Department has announced that there will be no extension of the Income Tax Return (ITR) filing deadline, which remains on schedule. As of now, over 3 crore returns have been successfully filed, with 91 percent of them being verified electronically. Taxpayers are advised to adhere to the existing deadline for filing their returns.

Despite the floods in North India, the income tax authorities have decided not to extend the last date for filing returns, which remains on July 31, as confirmed by finance ministry officials. The possibility of an extension had arisen due to the adverse weather conditions.

According to the IT department, more than 3 crore returns have already been filed, and 91 percent of them have been verified electronically.

Tax Experts Request to Income Tax Department
Salaried taxpayers under scrutiny for rent, home loan frauds in INCOME TAX Returns.
INCOME TAX Returns for FY 2022-23.

However, tax experts are urging the government to take into account the havoc caused by the floods and the technical glitches in the tax portal, and consider extending the deadline.

Advocate and tax expert Narayan Jain highlighted the challenges faced by people in flood-affected states, where roads have been damaged or blocked due to landslides. Additionally, the tax portal’s inefficiencies in handling the high volume of users have also been a concern.

Jain emphasized that granting an extension would offer relief to honest taxpayers, enabling them to file their returns without added stress. Moreover, he believes such an extension would not result in any revenue loss for the government.
The Income Tax Department has announced that its website is undergoing an upgrade, so it will not be accessible from July 22 to July 24. However, taxpayers can rest assured that the tax filing portal will function normally during this period. The services related to Income Tax Return (ITR) and Tax Deducted at Source (TDS) statements, among others, will remain accessible and available through the e-Filing website www.incometax.gov.in. Therefore, taxpayers can continue to use the portal for their tax-related transactions without any disruption during the mentioned upgrade period.

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