ITR Penalties: According to tax experts, claiming wrong deductions leads to wrong reporting of income. Claiming exemption of HRA on the basis of fake rent receipts or claiming deduction on the basis of false documents is considered as misreporting under the Income Tax Act, 1961.
Income Tax Department: If you have also done ITR (ITR Filing) till 31st July, then you must read this news. It is always advised by tax experts that you should be careful while claiming tax exemptions and deductions while filing income tax returns. The Income Tax Department may ask you for proof of claimed deductions and exemptions while processing ITRs filed for the current year or previous years.
No need to worry
If you can give the evidence related to this to the department, then you do not have to worry about any kind of claims. However, if a person is unable to provide proof or the Income Tax Department is not satisfied with the proof provided by you, then the claimed deduction and tax exemption will be treated as uncertified. Not only this, in such cases, you can be fined by the Income Tax Department.
Evidence was sought from the salaried clause
According to tax experts, claiming wrong deduction leads to wrong reporting of income. Claiming exemption of HRA in excess on the basis of fake rent receipts or claiming deduction on the basis of false documents is considered as misreporting of income under the Income Tax Act, 1961. Recently, it was told that by sending notices to the salaried class persons, the Income Tax Department has sought proof of deduction claimed for the ITR filed for the financial year 2021-22.
Income Tax Department can identify such cases
Chartered Accountant Ashish Mishra told that the Income Tax Department has found that taxpayers are claiming fake deductions and exemptions to claim tax refund while filing ITR. Such fake people can be tracked by the Income Tax Department. For example, if one has claimed deduction for HRA on the ground that rent has been paid to parents. And if the parents fail to report this rental income in ITR, the Income Tax Department can identify such cases.
If the taxpayer is not able to provide the documents when asked by the department, then the Income Tax Department can impose both fine and penalty for giving wrong information about income. Under Section 270A of the Income Tax Act, a penalty equal to 200% of the tax payable on such misreported income will be levied. Let us tell you that the amount of interest can also be included in the fine. That’s why it is important that while filing income tax return, you should give only that information for which you have strong proof.
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