The Income Tax Department on Monday, July 14, launched multi-city raids targeting entities and individuals allegedly involved in helping taxpayers claim bogus deductions under various sections of the Income Tax Act.
According to agencies, the searches are focused on false deductions related to political donations under Section 80GGC, along with inflated claims for medical insurance, tuition fees, and certain categories of loans.
Section 80GGC of the Income Tax Act allows individuals to claim deductions for donations made to registered political parties or electoral trusts. However, sources say some taxpayers are using fake bills and unregistered parties to claim false deductions under this section.
More than 200 locations are under the scanner, with tax filers, accountants, and other intermediaries suspected of preparing fake documents to help individuals evade taxes.
According to a PTI report, the operation follows repeated reminders to such taxpayers to correct their returns under the department’s NUDGE (Non-intrusive Usage of Data to Guide and Enable) initiative, which promotes voluntary compliance under a ‘trust taxpayers first’ approach.
However, officials found that several taxpayers did not file updated and accurate Income Tax Returns (ITRs) despite being flagged.
The department’s NUDGE framework uses data analytics to spot suspicious claims and nudges taxpayers to file honest returns without immediate penalties. But officials said the scale of bogus claims, especially under Section 80GGC, triggered this crackdown.
Searches are expected to continue in the coming days as the department tracks the network of agents and beneficiaries involved.
