'High risk' income tax refund claims on Income Tax Department's radar

Verification of high-risk refund claims in Income Tax (IT) returns for assessment year 2024-25 (financial year ending March 31, 2024) will be done systematically following standard operating procedures (SOPs). The objective of which is to verify whether false refund claims are made in an organized manner or by a single fraudster.

If multiple IT returns are filed using the same e-mail and there is a clear pattern of fake claims such as under-reporting of house rent, fake donations under Section 80G for deduction or excess details etc., then more verification and Investigation will be required. A government official said. It was also clarified that the intention in this regard is not to harass the taxpayers. If the claim is found true then the investigation will be closed. But if the claim is found to be fake then further action will be taken as per SOP.

The IT Systems Directorate under the Finance Ministry has issued SOP instructions to deal with high-risk income tax refund cases. This SOP has been sent to the concerned assessing officer, TDS charge officers and investigation wing officers. For example, the instructions regarding the SOP sent to the investigating branch officials state that there have been incidents in the past where refund claims were submitted in various wrong ways. For example, malpractices like wrong claiming of TDS credit, under-reporting of income, over-reporting of deductions, claiming of false expenditure etc. were committed. The cases isolated on the basis of multiple rules, including returns filed through a single e-mail, have been sent to the nodal officer of the Central Registry Unit for further investigation.