The Income Tax Department has intensified its crackdown on fraudulent Income Tax Returns (ITRs), utilizing data analytics and AI to identify false claims, including inflated TDS filings. Key areas targeted include HRA, health insurance, and educational loans. In the past four months, approximately 40,000 taxpayers used the ITR-U facility, enabling them to rectify incorrect claims worth over Rs 1,045 crore. Tax experts caution that submitting fake deductions can lead to severe repercussions, including up to a 200% penalty under Section 270A, interest charges, and even imprisonment for willful tax evasion. To enhance compliance, the latest ITR forms require more transparency, mandating accurate disclosures related to HRA, insurance, and loan details. Taxpayers are encouraged to file diligently, avoiding third-party refund agents, and can use ITR-U within five years to amend errors or retract misleading claims. Staying informed and ensuring accuracy is crucial to avoid penalties and tax notices.
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