Latest news with #Section80GGC
Time of India
19-07-2025
- Business
- Time of India
Manipulated again: I-T busts fresh fraud in political donation tax deduction claims
In its continuing action against fraudulent tax deductions , the Income Tax (I-T) Department has found fresh cases of manipulation even after taxpayers were given the opportunity to correct their returns. According to officials, a number of individuals who had previously claimed deductions for political donations under Section 80GGC of the Income Tax Act have simply withdrawn those claims and shifted the same amounts to other deduction categories such as home loan interest and education loans. Earlier, the department had identified approximately 200 individuals whose high-value claims were suspected of being linked to tax evasion totalling ₹35 crore. Emails were sent to these individuals informing them that, during the verification of their income tax returns for the assessment years 2022–23 and 2023–24, deductions under Section 80GGC were found to be suspicious. Many of these claims, some running into lakhs of rupees, mentioned donations to both registered political parties and registered unrecognised political parties. After the Mumbai zone, the Telangana-Karnataka zone recorded the second-highest value of declared deductions under Section 80GGC. Of the ₹7,124 crore in deductions declared across the country, ₹1,641 crore came from this region. Within this zone, 15,223 employees in Telangana were suspected of having falsely claimed deductions for political donations. Despite the department offering a voluntary compliance window that encouraged taxpayers to withdraw incorrect claims and file updated returns within seven days, many individuals failed to respond to the notices. Among those who did respond, officials discovered that several had manipulated their updated returns. Meanwhile, many taxpayers who claimed deductions under Section 80GGC of the Income Tax Act, 1961, have received notices from the I-T Department. In response, the department has introduced a new facility on its portal. This feature provides guidance for taxpayers who have received notices under Section 158BC of the Income Tax Act, 1961, on how to respond. Live Events Section 80GGC of the Income Tax Act, 1961, allows individual taxpayers to claim deductions for contributions made to political parties or electoral trusts. These deductions are intended to promote transparency in political funding and are subject to specific eligibility rules, documentation requirements, and deduction limits. However, due to the increasing number of false claims being made under this provision, the tax department has initiated fresh measures to tackle the misuse of the deduction. Earlier this week, on Monday, the Income Tax Department launched large-scale search operations across the country targeting individuals and entities accused of facilitating fake tax deductions. Officials raided over 200 premises linked to people who were allegedly helping taxpayers to falsely claim deductions under various heads, including political donations, tuition fees, and medical expenses. A major focus of these operations was on deductions claimed under Section 80GGC, which allows contributions to registered political parties to be deducted from taxable income.
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Business Standard
15-07-2025
- Business
- Business Standard
Political donations, medical claims:How to avoid I-T scrutiny on deductions
The Income Tax Department has searched 200 places nationwide to clamp down on bogus tax deductions, news agency ANI reported on Monday. The searches were at individuals and intermediaries suspected of inflating claims under key sections of the Income Tax Act, including political donations (Section 80GGC), tuition fees, and medical expenses. ANI quoted unnamed sources as saying that the crackdown follows the detection of fake bills and misuse of exemptions, with several intermediaries allegedly facilitating fraudulent claims. Why are these deductions under scrutiny 'These categories are vulnerable to misuse as they rely heavily on self-declared documents and are relatively easier to inflate or fabricate because they are not verified at the time of filing,' Niyati Shah, chartered accountant & vertical head – personal tax at 1 Finance, told 'Business Standard'. 'Political donation receipts may be issued by lesser-known entities, tuition fee payments might be claimed even for non-eligible institutions, and inflated or unrelated medical bills may be shown under critical illness deductions,' she said. Political donations accounted for over Rs 10,000 crore in tax claims in a single year, with a tenfold surge between FY17 and FY22, said Shaily Gupta, partner at Khaitan & Co. 'More than 650,000 taxpayers are currently under scrutiny for suspicious deductions, including 400-plus tech professionals linked to a Rs 110 crore refund racket,' she said. Political donations are flagged due to concerns about 'tax evasion, money laundering, and misuse of tax exemption provisions,' particularly where contributions seem inconsistent with the donor's income or are made to shell entities, noted Ritika Nayyar, partner at Singhania & Co. Bogus claims 'If claims are found to be bogus, deductions are disallowed, and the taxpayer's income is recomputed,' Shah said. 'Penalties under Section 270A for misreporting income can reach up to 200 per cent of the evaded tax, and in severe cases, prosecution under Section 277 may follow.' Even if taxpayers claim they were misled by intermediaries, 'ignorance is not a defence,' Gupta cautioned. Experts say maintaining records will help if their tax claims are scrutinised: -For political donations, retain digital payment proof and valid receipts from registered parties. -For tuition fees, preserve official receipts from recognised institutions. -For medical expenses, maintain insurance details, hospital bills, and prescriptions. 'Cross-verify that claims align with Form 26AS and AIS, and avoid cash transactions which are ineligible for deductions,' Shah said. Can AI tools like TaxAssist help? While the tax department's AI-driven TaxAssist tool can guide taxpayers and flag anomalies, it is not a substitute for professional advice. 'AI may simplify compliance for basic cases but cannot replace expert judgment in complex or high-value filings,' Nayyar said. Taxpayers are urged to file honest returns and avoid shortcuts that may trigger scrutiny. 'Compliant documentation is the best protection against adverse tax action,' Gupta stressed.
Time of India
15-07-2025
- Politics
- Time of India
Bogus political donations: Income tax raids in Telangana go-betweens
HYDERABAD: Income tax (I-T) officers on Monday carried out searches at multiple locations across Andhra Pradesh and Telangana, including Hyderabad, targeting three intermediaries allegedly involved in facilitating fraudulent claims of deductions in income tax returns (ITRs) through fake political donations and other fabricated expenses. The searches are part of a broader investigation into organised rackets across the country involving false filings under various I-T sections, including 80GGC. You Can Also Check: Hyderabad AQI | Weather in Hyderabad | Bank Holidays in Hyderabad | Public Holidays in Hyderabad In three separate operations, searches were conducted in Tirupati (Chittoor district), Pamuru (Prakasam district), and Nizampet (Hyderabad). According to sources, the department identified the individuals as G Chaitanya in Tirupati, V Srinivas in Pamuru, and M Purushottam Reddy in Nizampet. They allegedly acted as intermediaries, collecting a 10% commission for filing ITRs on behalf of clients using false claims under Section 80GGC - a provision meant for genuine political donations and other sections. Investigators found that the intermediaries helped a wide section of salaried individuals, including IT professionals, LIC employees, and employees of RBI Mint in Hyderabad - claim inflated refunds based on either fictitious or manipulated donation entries. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Is it legal? How to get Internet without paying a subscription? Techno Mag Learn More Undo In some instances, no donation took place, while in others, the amount was routed back to the employees in cash after a formal donation entry was shown. Most of the political parties involved were found to be based in Gujarat, Uttar Pradesh, and Bihar. Section 80GGC abused The department's probe revealed systematic misuse of several sections of the I-T Act, including 10(13A), 80GGC, 80E, 80D, 80EE, 80EEB, 80G, 80GGA, and 80DDB. The fake claims were often filed using temporary email IDs and common IP addresses, a pattern that helped the tax authorities track down the intermediaries. These email accounts were later abandoned, which prevented taxpayers from receiving official notices or alerts. In the Chittoor case, six LIC employees were reportedly questioned and admitted to paying a commission to the intermediary in exchange for refunds generated through inflated political donation claims for the financial year 2022-23. The I-T department has also noted that growing awareness has led several employers, particularly in the IT sector, to reject dubious Section 80GGC claims during verification. This has pushed intermediaries to file returns directly on behalf of taxpayers, using falsified entries to secure higher refunds. The ongoing investigation also exposed attempts to submit fraudulent TDS returns to inflate refunds. Individuals from MNCs, PSUs, academic institutions, and the startup ecosystem were among those implicated.
Time of India
14-07-2025
- Business
- Time of India
IT dept uncovers ₹500-cr tax refund fraud in Trichy, southern dist
Trichy: The income tax department has unearthed a ₹500-crore tax refund fraud involving fabricated income tax returns during investigations and search operations across Trichy and several other southern districts. In a statement on Monday, the department said raids were conducted across 19 districts, including Trichy, Pudukkottai, Salem, Madurai, Sivagangai, Theni, Virudhunagar, and Tirunelveli, exposing the large-scale scam. Preliminary findings revealed that several tax professionals and intermediaries across Tamil Nadu facilitated thousands of taxpayers in filing fraudulent refund claims. These claims were made by submitting fabricated details under various deduction provisions such as Section 80GGC (donations to political parties), Section 80D (medical insurance premiums), Section 80C (tuition fees), and Section 10(13A) (house rent allowance), among others. By falsely inflating deductions through these methods, taxpayers were enabled to claim illegitimate refunds, causing an estimated revenue loss of ₹500 crore to the government, the department said. Investigations also revealed that these agents had created dedicated email IDs specifically to file fraudulent returns on behalf of their clients. Thousands of returns were filed using these accounts, leading to the wrongful disbursal of crores of rupees in refunds. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Cách giao dịch ETH/USD mà không cần nắm giữ Ether IC Markets Tìm hiểu thêm Undo The operations were led by Michael Jerald, IRS, additional director of income tax (investigation), Madurai, supported by officers Sweedha, IRS (Trichy), Raveendran, IRS (Madurai), Venu Kumar (Tirunelveli), and Ramesh, ITO (Madurai). In light of the findings, the income tax department has urged all taxpayers who may have filed incorrect or fraudulent returns during the current or previous financial years to voluntarily come forward and submit revised or updated returns. This, the department said, would help restore trust and allow taxpayers to avoid penalties, prosecution, and other legal consequences.
The Hindu
14-07-2025
- The Hindu
Income Tax dept busts major refund fraud in 19 districts of Tamil Nadu
The Income Tax Department has said that it has uncovered and thwarted a large-scale tax refund fraud involving filing of fabricated tax returns in Tamil Nadu. Investigations and search operations were carried out across 19 districts in Tamil Nadu, including Tiruchi, Pudukottai, Salem, Madurai, Sivaganga, Theni, Virudhunagar and Tirunelveli. These operations were conducted under the leadership of Michael Jerald, Additional Director of Income Tax (Investigation), Madurai, with the support of officers from Tiruchi, Madurai and Tirunelveli. The department initiated inquiries under various provisions of the Income Tax Act into the fraudulent claims of tax deductions that were falsely declared in order to obtain undue tax refunds. Preliminary findings revealed that several tax professionals and intermediaries across Tamil Nadu had been facilitating thousands of taxpayers to file fake refund claims by submitting fabricated details in their tax returns. As a result, widespread searches and inquiries were being conducted across south Tamil Nadu. The fraudulent claims predominantly involved claiming fake deductions under various sections such as Section 80GGC (donations to political parties), Section 80D (Medical insurance premiums), Section 80 C (Tuition fees) and Section 10 (13 A) House Rent Allowance along with other deduction clauses, a press release from the Income Department said here on Monday. Through these deceitful methods, tax payers were assisted in falsely enhancing their tax deductions enabling them to claim illegitimate refunds. The fraudulent refund amount is estimated to be approximately ₹500 crore. Investigations have unearthed that dedicated email IDs were created specifically by these agents to file fraudulent tax returns on behalf of taxpayers. Thousands of returns were filed through these email IDs resulting in crores of rupees being refunded wrongfully. During the course of the search operations, incriminating evidence had been recovered and seized. The Income Tax department continues to conduct investigations across all its offices. Taxpayers had been cautioned to remain vigilant and refrain from engaging in such unethical and illegal practices that not only cause revenue loss to the government but expose them to penal consequences. All taxpayers who may have filed incorrect or fraudulent tax returns during the current or previous financial years had been advised to voluntarily come forward and file revised or updated returns. This would not only help in building trust between the taxpayers and the department but also help them avoid penalties, legal proceedings, and prosecution, the release added.
