Key Points
While filing income tax return (ITR), one should be very careful at the time of claiming tax exemptions and deductions..
The income tax department can demand proof for the deductions and tax exemptions claimed in the ITRs while processing the ITR filed for the current year or even for previous years...
Divakar Vijayasarathy, Founder and CEO, business consulting group DVS Advisors, says, "Claiming higher HRA exemption based on fake rent receipts or claiming deductions under Chapter VI-A without documentary evidence amounts to misrepresentation or suppression of facts and is considered as misreporting of income under the Income Tax Act, 1961.". Recently, it was reported that the income tax department has sent notices to salaried individuals demanding proof of the deductions claimed for the ITRs filed for FY 2021-22 (AY 2022-23)...
- an ITR filing website - says, "The income tax department has observed that taxpayers are claiming fake deductions and exemptions to claim tax refunds while filing ITRs..
For example, if a person has claimed deductions for HRA by claiming that rent is paid to parents. and if parents missed reporting this rental income in their ITR, the Income Tax department can identify such cases."..
