ITR Filing: Most people follow the right path to save income tax, but some people choose the wrong path. March 31 is fast approaching and people are making a lot of investments. Many people also think about saving tax by using fake rent receipts. For the last several years, many people have been saving tax in this way, but the Income Tax Department also sees all this and now it has started tightening the noose on such people. Let us know how the Income Tax Department catches ITRs with fake rent receipts and sends notices.
Fraudsters are caught by AI
In the era of Artificial Intelligence i.e. AI, the Income Tax Department is also using AI. It is through AI that the Income Tax Department is catching fake rent receipts. For this, the Income Tax Department matches Form-16 with AIS Form and Form-26AS.
The difference is known in a jiffy
All the 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 a difference, it is immediately visible. This entire process is done automatically and in a jiffy with the help of AI.
When does one have to provide the landlord’s PAN?
There is a rule related to house rent allowance that he can claim deduction of HRA only when he is getting HRA from the company. On the other hand, if the employee pays rent of more than Rs 1 lakh, then he will also have to provide the PAN number of his landlord.
The claim amount is matched with PAN
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 the transactions related to PAN are written in the AIS form. If a difference is found between the two, then a notice is sent to you by the Income Tax Department.
There is no investigation on rent up to Rs 1 lakh!
If your company gives HRA and you are claiming rent of less than Rs 1 lakh annually, then you will not have to provide the PAN of your landlord. That is, in this situation you can claim HRA up to Rs 1 lakh, which will not be checked by the Income Tax Department whether it is correct or fake.
Why is there fraud on HRA?
The biggest reason for fraud regarding HRA is that it saves tax on a lot of income. Suppose you showed the rent of your house as Rs 20 thousand per month i.e. Rs 2.40 lakh annually, then you will not be taxed on about 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 rebate, so maybe the scope of HRA will also decrease and due to that the frauds will also reduce.
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