Individuals are being scrutinized by the income tax department for fraudulent claims on donations, investments, and interest payments. Extensive searches revealed bogus donations to political parties and charities, as well as false claims on loans and house rent allowances. A new procedure is prompting taxpayers to revise returns or face penalties.
NEW DELHI: In a season of making annual declarations on investments and deduction, the income tax department has put employees and employers on notice after it came across lakhs of instances of individuals making bogus claims related to donations to political parties and charitable organisations as well as false investment and interest payment claims.
It all goes back to searches and surveys conducted by the tax department in the last few years, which showed individuals claiming deductions for donations to unrecognised political parties that enjoy certain tax exemptions.
Authorities found several instances of money being returned to the donors. In a large number of cases, it was found that actual donations were not made.
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