Massive Tax Fraud Uncovered: ₹1070 Crore Lost
In a sweeping crackdown, India’s Income Tax Department has reportedly exposed over 90000 salaried taxpayers for making false deduction claims. This large-scale fraud has cost the tax exchequer more than ₹1070 crore, prompting a stringent overhaul in the tax filing process to prevent further misuse.
ITR Filing Gets Stricter in FY25
To counter fraudulent claims, the Income Tax Department has made significant changes to the Income Tax Return (ITR) utilities—specifically ITR-1 and ITR-4. These forms now require detailed proof for deductions under various sections, making it harder for taxpayers to submit vague or unsupported entries.
Deductions Must Be Backed with Proof
Section 80C claims, covering investments like PPF, ELSS, and LIC, now require policy numbers or document IDs. Similarly, health insurance deductions under Section 80D must include the insurer name and policy number. Vague lump-sum declarations are no longer accepted.
Loan and EV Deduction Claims Under Scrutiny
The new rules also impact deductions under Sections 80E, 80EE, and 80EEA, related to education and home loans. Taxpayers must now provide lender names, loan account numbers, and sanction dates. For electric vehicle deductions under Section 80EEB, the vehicle registration number is mandatory.
Technology-Driven Cross-Verification
The reforms are backed by the Annual Information Statement (AIS), which allows the department to match deductions with actual financial data. This ensures every claim can be verified against official records, reducing room for error or fraud.
Penalties for Non-Compliance
Taxpayers who fail to support their deduction claims may face penalties up to 200% of the tax amount, annual interest at 24%, and even prosecution under Section 276C. The government’s message is clear—compliance is no longer optional.
Conclusion: A New Era of Tax Accountability
India’s new tax filing norms represent a major shift toward transparency and accountability. With stricter documentation and automated verification, fraudulent deductions will no longer go unnoticed. Taxpayers must now adapt to the detailed filing process to avoid penalties and remain compliant.
