`Ye Tax Nahi Aasaan...`: I-T Dept Puts Salaried Tax Payers Under Radar For Rent, Home Loan Claims

New Delhi: According to a report, many salaried taxpayers are being investigated by the income tax department for filing income tax returns (ITRs) that included phoney rent receipts from close relatives, additional claims against home loans, fictitious donations, and other unethical tax evasion schemes encouraged by some experts with the promise to reduce tax outlay and increase a refund.

Earlier, it was quite simple to evade tax authorities, but now many people may struggle because software used by the revenue department has detected their returns, according to a July 22 article in the Economic Times.

These taxpayers received notices from tax investigators requesting supporting documentation for their tax exemption claims. According to the report, which cited unnamed sources, these notices are sent out for exemptions from the house rent allowance under section 10 (13A) for salaried individuals, the allowance under section 10 (14) for hiring a helper to perform official duties, or the deduction under section 24 (b) of the I-T Act for interest paid on home loans.

Reassessment is possible for salaried people making more than Rs 50 lakh within ten years. The reassessment, however, can be done for eight years for anybody making less than Rs 50 lakh.

Additionally, the IT department may more easily compare donation information provided by individuals with information provided by political parties or charity trusts in their tax filings thanks to the computerization of records.