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Jul 15, 2025
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Income Tax Dept cracks down on fake ITR refunds: Bogus deductions, exemptions under scanner
The Income Tax Department initiated a large-scale verification operation across multiple locations in the country on 14th July 2025, targeting individuals and entities facilitating fraudulent claims of deductions and exemptions in Income Tax Returns (ITRs), the Finance Ministry said in a release on Monday.
This action follows a detailed analysis of the misuse of tax benefits under the Income-tax Act, 1961, often in collusion with professional intermediaries.
Investigations have uncovered organised rackets operated by certain ITR preparers and intermediaries, who have been filing returns claiming fictitious deductions and exemptions, the release said. These fraudulent filings involve the abuse of beneficial provisions, with some even submitting false TDS returns to claim excessive refunds, it added.
Tax dept uses data analytics, advanced tools to track fraudulent claims
To identify such irregularities, the tax department has leveraged technology tools, including data analytics, third-party sources, conduct intelligence, and advanced artificial intelligence tools, the ministry said.
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