Faked Deductions In Your ITR? Beware, AI Is Catching Every Trick & It Could Land You in Jail

Key Highlights:

- Rs 1,045 crore in fake refunds claimed by 40,000 taxpayers

- 200 percent penalty and up to 7 years in jail for false claims

- ITR-U form allows correction of 4-year-old mistakes

New Delhi: If you're making false claims in your Income Tax Return (ITR) just to get a higher refund, be very careful. The Income Tax Department is now using AI and data analytics to detect fraud.

40,000 Taxpayers Identified, Rs 1,045 Crore in Fake Refunds

So far, 40,000 individuals have been identified for claiming over ₹1,045 crore in fraudulent refunds. Most of them have now admitted their mistakes and updated their ITRs.

How AI is Detecting the Fraud

The tax department is now cross-verifying ITR claims using TDS data, bank transactions, and AIS (Annual Information Statement). If anything seems mismatched, automated notices are immediately sent.

Fake Claims Under HRA, Loans, Donations

Several tax agents were misleading people by promising "guaranteed refunds" through fake entries in HRA, health insurance, education loans, home loans, and donations. All such entries are now under scrutiny.

Penalties and Jail for Fraudulent Filings

If caught, taxpayers may face a penalty of up to 200% of the tax amount and up to 7 years in jail. The department says this is just the beginning of stricter actions.

You Can Still Fix Past Mistakes with ITR-U

If you've made a false claim by mistake, you can still correct it using the ITR-U form. This form allows you to revise returns for the past four years.

Stick to Genuine Claims Only

To avoid trouble, file deductions only based on actual documents. Don’t fall for agents promising extra refunds. Always match your data with AIS and Form 26AS before filing.