I-T Department Probing Exaggerated Exemption Claims in Returns by Salaried Individuals

Overview of the Drive by the Income Tax Department
Since the beginning of the financial year, the Income Tax department has been issuing notices to salaried taxpayers. These notices question the exemption claims made in their tax returns. The tax authorities have initiated a probe into returns where unrealistic exemption claims were allegedly made.

Focus on the ‘Others’ Exemption Column
Taxpayers have reported large amounts in the ‘other’ exemptions section of their returns. While the tax authorities have previously addressed such cases, this current investigation is more extensive. The department is scrutinizing a wider volume of claims, with the goal of improving the process to make it more foolproof.

Investigating Mediclaim and Education Loan Exemptions
The ‘others’ column encompasses various types of claims, including Mediclaim and education loans, which have caught the attention of tax authorities. Sources reveal that the I-T department is focusing especially on claims made by salaried individuals. The department is conducting these investigations over and above those returns selected for random scrutiny.

Notices Issued to Revise Tax Returns
Many of the fake returns were found to be associated with private-sector employees. The issued notices request individuals to revise their tax returns. Those who cannot file revised returns due to time constraints may need to pay the additional taxes owed.

Why the Drive is Important
Sources suggest that while these tactics may offer minor savings, they don’t significantly reduce the overall tax liability. The drive aims to send a message that fake claims will not go unchallenged, regardless of their size.