Income Tax Department Warns Against False Claims In ITR Filing

The Income Tax Department has issued a stern warning to taxpayers regarding the submission of exaggerated or bogus claims while filing their income tax returns (ITRs). This advisory comes as the ITR filing season for the assessment year 2024-25 approaches its deadline on July 31. The department emphasized that making false claims, under-reporting income, or exaggerating deductions is a punishable offense that can lead to serious legal repercussions, including hefty fines and potential imprisonment.

As of July 26, over five crore ITRs have been filed, and the department is urging taxpayers to ensure accuracy in their filings to avoid delays in refund processing. The department stated that refund claims are subject to verification checks, which can cause significant delays if discrepancies are found. Taxpayers are advised to file their returns correctly to facilitate timely refunds, as any inaccuracies may prompt requests for revised returns.

In its communication, the Income Tax Department specifically cautioned against claiming incorrect Tax Deducted at Source (TDS) amounts, under-reporting income, or submitting claims for bogus expenses. The department reiterated that all claims must be “correct and accurate,” warning that filing false claims is a serious offense that could lead to severe penalties.

Taxpayers have the option to claim various deductions and exemptions to reduce their tax liability under the old ITR filing regime. However, those opting for the new regime will benefit from lower tax rates but will not be able to avail these deductions. The Central Board of Direct Taxes (CBDT) reported that more than 66% of ITR filings this year were under the new regime, which aims to simplify the direct tax system.

In the event of delayed refunds, taxpayers are encouraged to check their e-filing accounts for any messages from the Income Tax Department and respond accordingly. The CBDT has also addressed recent budget proposals that extend the withholding period for refunds from 30 to 60 days in certain cases. This measure is intended to rationalize the process for cases where a demand for tax is likely to arise.

Overall, the Income Tax Department’s emphasis on accurate and honest reporting underscores the importance of compliance with tax laws. Taxpayers are urged to be vigilant and ensure that their filings are free of inaccuracies to avoid the risk of penalties and legal consequences.