The verification process for ‘high-risk’ income tax refund claims for the assessment year 2024-25 (financial year ending March 31, 2024) will now follow a systematic approach through a standard operating procedure (SOP). This initiative aims to determine whether false refund claims have been submitted systematically or by a single individual.
According to a government official, “If multiple income tax returns are filed using the same email address, and there’s a discernible pattern of fraudulent claims—such as incorrect house rent allowances, fake donations purportedly qualifying for deductions under section 80G, or inflated expenses—further verification and inquiry will be imperative.”
The directorate of income tax systems, operating under the ministry of finance, has issued guidelines for managing high-risk income tax refund scenarios. These directives have been communicated to relevant assessing officers, TDS charge officers, and officials from the investigation wing.
For example, the SOP highlights that officials in the investigation wing should note: “Previously, there were reports of fraudulent refunds claimed through various methods, including incorrect TDS credit claims, underreporting of income, exaggerating deductions, and submitting bogus expenses. Cases identified based on specific criteria, including suspicious clusters of returns linked to a common email address, have been referred to nodal officers at the Central Registry Unit for further action.
The SOP instructs officials to initially verify the identity of the key person associated with the common email using available internal databases, such as the Insight portal and the e-filing portal. If this process does not yield results, notices may be issued under section 131 (1A) to the relevant taxpayers, requesting information and documentation to substantiate claims related to exemptions, deductions, and expenses.
The goal is not to intimidate taxpayers,” the government official emphasized. “If the claims prove to be legitimate, the case is resolved. Otherwise, further investigation will follow as laid out in the SOP.”