The I-T department has been tracking AIS and AI tools to track and analyse financial data and identify such fraudulent claims. Here's why

False ITR Deduction Claims: Several taxpayers, including salaried individuals, have come under the lens over the years for claiming non-existent deductions, since they are not required to submit documents to back their income, losses or deduction claims when they file their returns.

In the backdrop of Income Tax Department's crackdown on fake deductions claims, several indiviauls hvae come under the radar over claiming non-existent deductions as taxpayers are not required to submit documents as proofof their income, losses or deduction claims.

The I-T department has already begun using the Annual Information Statement (AIS) and artificial intellegences (AI) tools to asses and track financial data with ain aim to identify such fraudulent claims. Now, many taxpayers have, over the years, received notices seeking proof or explanation of the discrepancies. As per rules, tax queries can be raised even after your return is processed and refund credited.

Documentary Proof Behind Claiming Deductions

The preffered choise is to be honest while claiming deductions and avail tax breaks only if one can back them up with documentary proof, should there later be a notice by the income tax department. For instance, taxpayers should ensure they can furnish rent receipts and agreements to back HRA claims, receipts for life and health insurance premiums,...

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