Income Tax Department cracks down on fraudulent claims, deductions
This story was originally published at 21:48 IST on 14 July 2025
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NEW DELHI – The Income Tax Department has started large-scale verification of claims and deductions, targeting individuals and entities facilitating fraudulent claims in income tax returns, the department Monday said. It carried out investigations, which found organised rackets that had been filing returns claiming fictitious deductions and exemptions.
"To identify suspicious patterns, the IT (income tax) Department has leveraged financial data received from third-party sources, ground-level intelligence, and advanced artificial intelligence tools," the department said in a release. "These findings are further substantiated by recent search and seizure operations conducted in Maharashtra, Tamil Nadu, Delhi, Gujarat, Punjab, and Madhya Pradesh, where evidence of fraudulent claims was found to have been used by various groups and entities."
Individuals and entities claimed exemptions without valid justification, the department said. Employees of multinational companies, public sector companies, and government bodies were among those implicated.
The department has carried out outreach programmes over the last year nudging suspected taxpayers to revise their returns and pay the correct tax. Nearly 40,000 taxpayers have updated their returns in the last four months, voluntarily withdrawing false claims amounting to INR 10.45 billion, the tax department said.
"The IT Department is now poised to take stern action against continued fraudulent claims, including penalties and prosecution wherever applicable," it said. "The ongoing verification exercise across 150 premises is expected to yield crucial evidence, including digital records, that will aid in dismantling the networks behind these schemes and ensure accountability under the law." End
Reported by Shubham Rana
Edited by Akul Nishant Akhoury
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