Mistake while filing ITR, you will be fined heavily..!?
ITR filers are liable to be penalized by the Income Tax Department if they have claimed false deductions on rent payments. So be careful before claiming wrong deductions while filing ITR. Everyone needs to be very careful while claiming tax exemptions and deductions while filing Income Tax Return (ITR). The Income Tax Department requests documents for deductions and exemptions while completing the processing of ITRs filed for the current or previous years. If taxpayers provide proper documents, they need not worry about claims. However, if the taxpayer fails to provide the documents or if the documents provided are not satisfactory to the Income Tax Department, the claimed deductions and exemptions will be treated as unsubstantiated. In such cases the Income Tax Department may impose penalty. Claiming improper deductions can lead to underreporting of income, according to tax experts. Hence it is necessary to be very careful while filing the IT return.
Diwakar Vijayasarathy, founder and CEO of business consulting group DVS Advisors spoke about this. 'Claiming excess HRA exemptions based on fake rent receipts or claiming deductions under Chapter VI-A without any documentary evidence can lead to misunderstanding of facts or suppression of information. He also said that this would be treated as false reporting of income under the Income Tax Act, 1961. Recently, the Income Tax Department had sent a notice to salaried employees to claim deductions on ITR submission for the year 2021-22. Speaking in this regard, Finance minister Nirmala Sitharaman said, 'Income Tax Department has sent one lakh notices regarding cases of non-declaration or underreporting of income by taxpayers. All these cases are related to the returns submitted 4-6 years back.
Abhishek Soni, CEO of ITR filing website Tax 2 Win, said, 'The Income Tax Department has noticed that taxpayers are claiming fake deductions and exemptions to get tax refund while filing ITR. Such fake deductions can be tracked by the Income Tax Department. For example, if a person claims HRA deductions on rent paid to parents and the parents do not declare this rental income in their ITR, such cases will be identified by the Income Tax Department. Penalty for false reporting of income. The Income Tax Department can impose penalties on those who falsely declare income. Interest is also allowed on the penalty. According to Vijayasarathy, a penalty of 200% will be imposed under Section 270A of the Income Tax Act on providing such false information about income.
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