Income Tax department’s big warning: Exaggerated, bogus claims for refunds punishable offence

The Income Tax Department has asked all citizen filing income tax returns to not make bogus claims for expenses, under-report their income or exaggerate deductions, this is a punishable offence causing delays in the issuance of refunds, reported PTI on Sunday, July 28.

The income tax return (ITR) filing session for the assessment year 2024-25 will end on July 31, this applies to all taxpaying citizens in the country whose accounts are not supposed to be audited, as per the report.

As per the report, the IT department and its taxation body Central Board of Direct Taxes (CBDT) have seen a total filing of more than five crore income tax return claims as of July 26, 2024. The IT department urged the taxpayers to file their returns accurately to get their timely refunds.

"Refund claims are subject to verification checks, which may cause delays. Accurate filing of ITR leads to quicker processing of refunds. Any discrepancies in the claims made will prompt a request for a revised return (to be filed by the taxpayer)," said the IT department, reported the agency.

The IT department also warned the ITR filing taxpayers not to claim “incorrect” tax deducted at source (TDS), they should not “under-report” their income or “exaggerate” their tax deductions or even submit such “bogus” claims for expenses. The department also said that the taxpayers' claims should be “correct and accurate,” as per the report.

"Filing a false or bogus claim is a punishable offence," said the IT department, as per the report.

Citizens who are filing ITRs can claim a variety of deductions and exemptions to lower their tax liability under the old tax regime. The new tax regime will prevent them from availing benefits like these but will lower their tax burden.

More than 66 per cent of the ITR filing this time was under the new tax regime provided by the Indian government to make the direct tax system simple and better, Ravi Agrawal the Chairman of CBDT told PTI.

In case the refund dues are delayed, the taxpayers should check their e-filing account to see if the IT department has sent them a form of communication in the same context, if yes, then people should respond to it through the “pending action and worklist section” tab, said the report.

CBDT chair Agrawal also said that cases in which refunds being extended up to 60 days, as compared to 30 days from the due date of assessment or reassessment proposed in the Budget 2024 “would not be very substantial in numbers,” as per the report.

"This is basically in those cases where there is already a demand in the case of the same assessee or the demand is likely to arise," Agrawal told PTI.

In cases where the refund's been generated but the assessment process is still going on it felt that there is a demand likely to come.“The provisions are that once the assessment is completed, then an assessee gets 30 days to pay the demand. So, demand gets due 30 days after the assessment and therefore, to adjust the refund, that 30-day period has to be there, and therefore, this timeline,” said the report quoting Agrawal.

"It is just rationalising that effectively. But then those refunds would be not very substantial in number, they would be very minuscule. It is only enablement," Agrawal told the news agency.