Data analysis indicated that many taxpayers may have claimed deductions for donations made to suspicious entities or failed to provide adequate information to establish the genuineness of such entities.
NEW DELHI: The Central Board of Direct Taxes (CBDT) has intensified its action against bogus claims of deductions and exemptions under the Income Tax Act, using a data-driven approach to identify suspicious filings and intermediaries facilitating tax evasion.
In a recent exercise, the tax authority acted against several intermediaries involved in filing income tax returns with incorrect claims on a commission basis. Investigations revealed that some of these intermediaries had set up nationwide agent networks to file returns claiming fraudulent deductions and exemptions, particularly to reduce tax liabilities and claim bogus refunds.
According to the CBDT, a significant portion of the false claims related to donations made to Registered Unrecognised Political Parties (RUPPs) and certain charitable institutions. Evidence gathered during enforcement actions showed that many RUPPs were non-filers, non-operational at their registered addresses, and not engaged in any political activity. These entities were allegedly used as conduits for routing funds, hawala transactions, cross-border remittances, and for issuing fake donation receipts.
Follow-up searches conducted by the department against some RUPPs and trusts unearthed incriminating evidence of bogus donations...
Business Data analysis indicated that many taxpayers may have claimed deductions for donations made to suspicious entities or failed to provide adequate information to establish the genuineness of ...