New Delhi: Taxpayers filing Income Tax Return (ITR) in the old tax regime should be careful in not claiming any tax refund in a wrong or fraudulent way. The Income Tax Department is taking the help of Artificial Intelligence (AI) to catch individuals who are trying to claim refunds by opting for wrong ways. If any taxpayer is caught, then the I-T officials can take strict action. The Income Tax rules state that any illegality could lead to a penalty of up to 200 percent, interest and even jail term.
In an awareness booklet, the Income Tax Department warned that some salaried employees are claiming refunds in ITR by showing wrong deductions or exemptions in the old tax regime. This is being done even after TDS, while its document proof is not available.
Employers opting for the old tax regime, the individuals are required to obtain information about deductions and exemptions from the employee through Form 12BB. The taxpayer is required to mandatorily submit all the necessary documents. The employer deducts TDS on this basis. However, the Income Tax department has found that several employees are demanding refunds by showing additional exemptions or wrong claims while filing ITR.
Wrong refund claims can lead to serious action against the taxpayer. For eg:
If the Income Tax department finds out that the proof for deduction/exemption is not available, the claim may be rejected.
The department has the power to impose a fine of up to Rs 200 percent under Section 270A.
Tax evasion of more than Rs 25 lakh can result in imprisonment of 6 months to 7 years.
In some cases, the offence can lead to a jail term of 3 months to 2 years.
The Income Tax Department said that they are identifying such wrong claims with the help of AI/ML and data analytics. Refund claims are now being checked with smart tools, making it easier to catch fraud.
To avoid any action by the Income Tax department, the employees should always file a correct ITR. If individuals are claiming any exemption or deduction, they should submit authentic documents. Do not claim refund in the wrong manner, otherwise legal action can be taken.
The Income Tax Department utilises AI to detect fraudulent ITR refund claims, particularly under the old tax regime. Incorrect deductions or exemptions, even with TDS deducted, result in severe penalties, including fines up to 200% and potential imprisonment. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
