The Income Tax Department has detected a large number of wrong claims of refunds. 90,000 salaried persons from both public sector undertakings and private sector have withdrawn wrong claims of exemptions totaling Rs 1,070 crore till December 31, 2024, to avoid tax. Government sources gave this information. During various search and seizure and survey operations conducted by the Income Tax Department, it has come to light that various persons are wrongly claiming deductions under sections 80C, 80D, 80E, 80G, 80GGB, and 80GGC of the Income Tax Act in their ITR, thereby reducing the tax received by the government.

Sources said that during the investigation it was found that such persons are employees of organizations working in various sectors including public sector undertakings, large companies, multinational companies, and private companies. Also, most of those wrongly claiming deductions were working in the same company. Analysis of the information available with the department revealed that there is a huge discrepancy between the total deductions claimed under section 80GGB/80GGC and the total receipts shown in the income tax returns of taxpayers.

Similarly, the deductions claimed under sections 80C, 80E, and 80G also appear suspicious, sources said. They said a list of employers (TDS deductors) has been identified and the tax department will reach out to as many persons as possible who are suspected of making fraudulent claims of deductions under sections 80E, 80G, 80GGA, 80GGC, and other deductions. The source said, "Further, verification has revealed that some erroneous elements have misled the taxpayers for wrong claim of deduction/refund." He said the department is holding meetings with employers to create awareness about the consequences of wrongly claiming deductions in income tax returns and the corrective measures that can be taken by taxpayers to correct their lapses.

A source said, "As of December 31, 2024, about 90,000 taxpayers have withdrawn the wrong claim of deductions of about Rs 1,070 crore in their ITRs and paid additional tax." As per the provisions of the Income Tax Act, of 1961, taxpayers can file updated returns on payment of some additional tax by rectifying the errors within two years from 2022-23 to 2024-25, after the end of the respective assessment year. Sources said meetings are being held with employers to intensify the department's efforts to promote voluntary tax compliance and reduce litigation.

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