Stox N Tax

₹1,045 Cr in Fake Tax Deductions Detected – HRA, 80C Claims Now Under Watch

Table of Contents

  • Why Salaried Taxpayers Are Under the Scanner
  • What Triggered This ₹1,045 Crore Crackdown?
  • Common Deduction Tricks That Can Get You in Trouble
  • States Where Most Fraud Was Detected
  • Real Danger: Preparer-Filed Returns With Fake Claims
  • How the IT Department Is Catching You Now
  • What You Must Do Immediately if You’ve Filed via an Agent
  • Final Warning: You Could Lose Refund + Face Penalties
  • FAQs for Salaried Individuals

Why Salaried Taxpayers Are Under the Scanner

The Income Tax Department is no longer looking at businessmen or large corporations alone. Salaried employees are now under intense scrutiny, especially those who:

  • File ITRs through agents or cyber cafes
  • Show high refunds every year
  • Don’t verify the deductions filed in their names

On 14th July 2025, the Income Tax Department launched a nationwide operation to crack down on bogus deduction and exemption claims, most of which were made by salaried individuals lured into refund rackets.

What Triggered This ₹1,045 Crore Crackdown?

A large-scale verification drive was initiated after AI tools and financial data flagged a pattern of inflated refund claims. These included false deductions, fake exemptions, and even manipulated TDS figures.

The result? Over ₹1,045 crore worth of fake refund claims have already been voluntarily withdrawn by taxpayers — many of whom are salaried employees working in MNCs, PSUs, and academic institutions.

Common Deduction Tricks That Can Get You in Trouble

Here are the most abused sections that you must re-check immediately in your ITR:

  • Section 10(13A) – Fake HRA receipts without actual rent
  • Section 80G – Bogus donation receipts
  • Section 80D – Inflated health insurance premiums
  • Section 80E – Fake education loan interest
  • Section 80EEB – EV loan deductions without owning a vehicle
  • Section 80GGA & 80GGC – Political or rural donations without proof

If you didn’t provide real proof for any of the above and still see deductions in your ITR, you could be part of the list that’s being flagged.

States Where Most Fraud Was Detected

The Department conducted search and seizure operations in:

  • Maharashtra
  • Tamil Nadu
  • Delhi
  • Gujarat
  • Punjab
  • Madhya Pradesh

If you filed your ITR through a preparer operating from these states, your return is at high risk of being under review.

Real Danger: Preparer-Filed Returns With Fake Claims

Thousands of salaried individuals had their ITRs filed by so-called “tax experts” who:

  • Created temporary email IDs to file returns in bulk
  • Claimed the same set of deductions across multiple returns
  • Promised higher refunds in exchange for a small commission
  • Disappeared post-filing, leaving taxpayers clueless when notices were issued

If you’ve never logged into your income tax portal or didn’t receive an acknowledgment yourself, it’s time to panic.

How the IT Department Is Catching You Now

This is not a manual exercise anymore. The Income Tax Department is using:

  • Advanced AI and pattern recognition tools
  • Data from third-party sources like employers, banks, and mutual funds
  • Comparison of similar returns filed by the same preparer
  • Mismatch detection in TDS claims, salary slips, and actual deductions

Even a single suspicious deduction can land your return in the red zone.

What You Must Do Immediately if You’ve Filed via an Agent

  1. Log in to the Income Tax Portal: Verify all details in your filed return.
  2. Check Each Deduction Claimed: Did you really pay for that donation or insurance? Do you have receipts?
  3. File a Revised Return: If you spot a wrong claim, file a revised ITR before a notice arrives.
  4. Avoid Intermediaries: Next year, file your return yourself or use authorized platforms only.

Final Warning: You Could Lose Refund + Face Penalties

Don’t assume you’re safe because you’re salaried.

  • If caught, you may be denied a refund, slapped with penalties, and even prosecuted for false claims.
  • Many taxpayers believed “everyone does it” — but now over 40,000 people have already revised returns fearing legal consequences.
  • If your email ID is not registered or you haven’t received updates from the portal, it’s a big red flag.

FAQs for Salaried Individuals

1. I filed through a tax agent. How do I know if my return has fake claims?
Login to the IT portal and verify every deduction against your actual documents. Many frauds were committed without the taxpayer’s knowledge.

2. Will I face action if I correct it now?
If you revise your ITR before any notice is issued, you’re unlikely to face penalties.

3. What happens if I do nothing?
If your return is flagged, you may face recovery of the refund, interest, penalty, and prosecution under Section 276C.

4. My return shows deductions I don’t remember claiming. Is that normal?
No. This is exactly how most frauds were carried out. File a revised return immediately.

5. Can salaried people be prosecuted for tax fraud?
Yes. The Act makes no exception based on employment type. If you benefited from false claims, you are liable.

Final Thoughts

Being salaried is not a shield.
If you’re blindly trusting your tax preparer, you may be risking more than your refund — possibly your entire financial record.

✔ Recheck your ITR now
✔ Withdraw false claims
✔ Stay compliant and sleep peacefully

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