Beware! Improper methods to save tax will no longer work; salary and TDS records will also be scrutinized..
The Income Tax Department has begun cracking down on fraudulent tax exemptions and incorrect claims. The department has directed companies and other employers to scrutinize salary-related filings for any discrepancies or irregularities. Additionally, the department is monitoring cases where taxpayers have switched their claims from one tax exemption to another after filing their returns.
According to officials, data verification has revealed instances where taxpayers initially availed of a tax benefit under one provision but later switched to claiming an exemption under a different provision. The department believes it is essential to investigate such cases to curb attempts at illicit tax avoidance.
**Instances of Improper Tax Benefit Claims**
During its scrutiny, the Income Tax Department identified cases where employees initially claimed House Rent Allowance (HRA) but subsequently withdrew that claim to seek tax exemptions under other allowances. These include transport allowances, education allowances, or allowances related to working in specific sectors.
Similarly, some taxpayers attempted to switch from donation-related claims to claiming tax benefits under different categories while filing revised or updated returns. Officials note that while the additional tax amount involved in many of these cases was relatively small, the nature of the claims raised suspicions. Consequently, the department is keeping a close watch on such cases.
**Preparing to Scrutinize Thousands of Filings**
According to the *Times of India*, sources indicate that the Income Tax Department has identified approximately 15,000 to 20,000 cases that could be selected for further investigation. The department is primarily focusing on cases involving suspicious claims ranging from ₹50,000 to ₹1 lakh.
This action is part of a departmental campaign that provides taxpayers with the opportunity to rectify errors via emails and text messages. In many instances, individuals voluntarily update their returns and submit the correct information. However, strict action may be taken against those who deliberately provide incorrect information.
**Responsibility Assigned to Employers**
The Income Tax Department has also reached out to companies and government departments. They have been asked to verify information related to employee TDS, specifically the details recorded in Form 24Q. The department wants employers to warn their staff about fraudulent tax-saving schemes and middlemen.
Officials state that the department now possesses modern data analytics tools, making it easier to identify suspicious claims. Additionally, the new income tax return forms require more detailed information regarding health insurance, education loans, and electric vehicle loans.
Disclaimer: This content has been sourced and edited from News18 Hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
