False Claims in ITR Under Scrutiny: Points to keep in mind to avoid income tax notice

financialexpress.com:

Gone are the days when economic irregularities were ‘business as usual’ and claiming 80C/ 80D/ 80G/ 10(13A)/24(b) or any other deduction in income tax returns would merely attract a disallowance and consequential additions, that too in case the returns were scrutinized. Gone are the days when the ITRs of salaried individuals were not subject to scrutiny as a practice. Gone are the days when the professionals filing tax returns of assessees could go scot free and the entire blame of wrong-doings would be the burden of the assessees only.

After coming down with a heavy hand on fake invoices under GST, now the Ministry of Finance has started alerting the income tax assessees on fake claims of deductions under Income Tax returns. Not only are assessees alerted, there are enquiries on this front from the return filers and tax consultants too.

The recent busting of rackets of fraudulent claims of tax refunds by employees of well-known companies, who had falsely claimed loss under the head income from house property in order to file fraudulent tax refund claims, is a case in point. The Income Tax Dept has also issued notices for furnishing proof of claiming rent allowances u/s 10(13A) and deductions on account of housing loan and interest u/s 24(b). Furthermore, the department has also started requiring the assessees to disclose the identity of the tax consultant who has helped in filing of the return.

Also Read: Income Tax Return: 10 ITR filing mistakes which can cost you dearly

In such cases penalties u/s 270A of the Income Tax Act can be levied upto 200% or more of the tax evaded. Further u/s 276C/ 277 prosecutions can also be invoked. Tax Consultants can also be booked u/s 278 of the Income Tax Act.

In view of the above,