Income Tax Return 2024: Taxpayers alert! Filing false claims in ITR to attract THESE penalties

financialexpress.com:

Income tax return filing FY 2023-24: You need to be careful while claiming tax exemptions and deductions in income tax return ITR. The Income Tax Department may ask you for proof for the deductions and tax exemptions you claim in the ITR during processing, whether for the current year or previous years.

Every year, the income tax authorities uncover fraudulent tax refund claims by taxpayers, including by employees of companies. On account of receiving these false refund claims, those taxpayers are served notices by the department. Many times, taxpayers also falsely report losses under the category of income from house property to file fraudulent refund claims.

Falsely claiming tax refunds by misreporting income or presenting false losses to lower one’s taxable income lands assessees in trouble. As per income tax rules, misreporting income is against the law and bound to attract heavy penalties. Section 270 of the Income Tax Act was amended post demonetisation to impose heavy penalties for misreporting and under-reporting of income by taxpayers.

Also read: Income Tax Return Filing: Why you should wait until June 15 to file ITR for FY 2023-24

Under Section 270A of the Income Tax Act, individuals who underreport or misreport their income may face penalties as determined by an assessing officer (AO), a commissioner (appeals), a principal commissioner, or a commissioner. These penalties can range from 50% to 200%. Enacted in the 2016 budget, this provision became effective in FY2016-17.

When an assessee discloses to the income tax department a smaller amount than his or her actual income, this is termed as under-reporting. On several occasions, this happens for various reasons, such as poor record-keeping or factual