ITR: The Income Tax Department has taken action against several intermediaries involved in filing income tax returns with fraudulent claims for deductions and exemptions under the Income Tax Act. The action revealed that some intermediaries had established a network of agents across India to file returns with false claims on a commission basis. Action may also be taken against those making deductions in this manner. The CBDT has also issued a warning to those filing ITRs regarding this.
Fake claims were made in the name of unrecognized political parties
It was observed that large amounts of fraudulent claims were made in the name of donations to registered unrecognised political parties (RUPPs) or charitable institutions to reduce their tax liability and also to claim fraudulent refunds. Evidence from the enforcement action revealed that RUPPs, many of which are non-filers, non-operational, do not have a registered address, and are not involved in any political activity, were being used to facilitate illegal transactions, transfer money across borders, and issue fraudulent receipts for donations.
The department conducted follow-up searches against some of these RUPPs and trusts and gathered incriminating evidence regarding fake donations by individuals and fake CSR by companies. The CBDT has strengthened its data-driven approach to early detection of suspicious claims and identification of high-risk behavioral patterns. One such risk pattern has been identified for taxpayers who have claims under section 80GGC or 80G of the Income Tax Act, 1961.
Data analytics has revealed that many taxpayers are suspected of claiming deductions for donations made to dubious entities or of not providing information required to verify the authenticity of the entities. A large number of taxpayers have already revised their income tax returns for the current AY i.e. 2025-26 and filed updated ITRs for previous years.