Income Tax: The Income Tax Department has taken significant action against the fake ITR scam, with investigations underway at 150 locations.

Income Tax: The Income Tax Department has started strict action on fake deduction and refund claims. Raids at more than 150 locations have revealed an organized racket. The department withdrew false claims worth Rs 1,045 crore and has now warned of strict action.

Income Tax: According to the Central Board of Direct Taxes (CBDT), the investigation has revealed that some ITR preparers and other middlemen were filing fake returns in an organized manner. These people used to claim maximum refunds through fabricated exemptions, fake documents, and wrong TDS returns.

AI, data intelligence and ground reports were used

The department resorted to financial data obtained from third-party sources, ground-level intelligence and advanced artificial intelligence (AI) techniques to identify suspicious activities. After this, search and seizure operations were conducted in Maharashtra, Tamil Nadu, Delhi, Gujarat, Punjab and Madhya Pradesh, from where important digital evidence was found.

Which sections were misused?

According to CBDT, the income tax sections that have been misused the most in ITR are:

Section 10(13A), 80GGC, 80E, 80D, 80EE, 80EEB, 80G, 80GGA, and 80DDB. Exemptions were claimed without proper proof under these sections, which included multinational companies (MNCs), public sector units (PSUs), government employees, academics and even entrepreneurs.

How does this fraud happen? (Income Tax)

Middlemen lure taxpayers to get more refund. In return, they take commission.

Fake email IDs are created while filing ITR, due to which official notices do not reach the taxpayer.

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