To save income tax,most people take the right path,but some people choose the wrong path. March 31 is fast approaching and people are investing a lot. Many people also think of saving tax by using fake rent receipts. For the past several years,many people have been saving tax in this way,but the Income Tax Department also sees all this and has now started cracking down on such people.
Let us know how the Income Tax Department catches ITR containing fake rent receipts and sends notices. Do you also want to know how you can avoid fake rent receipts? So let’s know.
Fraudsters are caught by AI
In the age of Artificial Intelligence i.e. AI,the Income Tax Department is now also using AI. The Income Tax Department is catching fake rent receipts through AI. For this,the Income Tax Department matches Form-16 with the AIS Form and Form-26AS.
Know what is the process
All transactions related to PAN card are recorded in these forms. When a taxpayer claims house rent allowance through rent receipt,the Income Tax Department matches his claim with these forms and if there is any difference,it is immediately visible. This entire process is done automatically and in minutes with the help of AI.
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When does one have to give the PAN of the landlord
There is a rule related to house rent allowance that he can claim HRA deduction only when he is getting HRA from the company. At the same time,if the employee pays rent of more than Rs 1 lakh,then he will also have to provide the PAN number of his landlord.
Know how verification is done
The Income Tax Department matches the amount claimed under your HRA with the amount sent to your landlord’s PAN number. Let us tell you that all transactions related to PAN are written in the AIS form. If any difference is found between the two,a notice is sent to you by the Income Tax Department.
No scrutiny on rent up to Rs 1 lakh
If your company gives HRA and you are claiming rent less than Rs 1 lakh annually,then you do not have to provide the PAN of your landlord. That is,in this case you can claim HRA up to Rs 1 lakh,which will not be investigated by the Income Tax Department whether it is true or fake.
Why fraud on HRA
The biggest reason for fraud regarding HRA is that it saves tax on a lot of income. Suppose you showed your house rent as Rs 20 thousand per month i.e. Rs 2.40 lakh annually,then you will not have to pay tax on almost this amount.
In such a situation,many people think that tax can be saved by making fake rent receipts,but now the Income Tax Department is catching these frauds and sending notices. However,from next year,in the old tax system,income up to Rs 12 lakh will be tax-free with exemption,so maybe the scope of HRA will also be reduced and due to this the fraud will also be reduced.
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