Income Tax Department Cracks Down on Bogus Deductions and Exemptions: ₹1,045 Crore Withdrawn After Warnings
Large-Scale Operation Against Tax Fraud Unveiled The Income Tax Department has launched a massive verification drive across multiple states, targeting widespread abuse of deductions and exemptions in Income Tax Returns (ITRs). This action follows a detailed forensic analysis revealing systemic misuse of provisions under the Income-tax Act, 1961 , in collusion with professional intermediaries and ITR preparers. Organised Rackets Behind Fictitious Claims According to a statement from the Central Board of Direct Taxes (CBDT) , investigations uncovered organised rackets run by certain ITR intermediaries who were systematically filing returns with fictitious claims. These schemes often involved fake deductions and exemptions and even false Tax Deducted at Source (TDS) filings , in a bid to inflate refunds . Many of these returns were facilitated through temporary email addresses , which were later abandoned—causing taxpayers to miss crucial communication from the tax department. ...