Incometax Returns

Taxpayers Beware!  Up to 200% Penalty for Faking Rent Receipts

August 4, 2023

👉Taxpayers who submit fake rent receipts in order to claim a deduction for house rent allowance (HRA) could face penalties of up to 200% of the tax that would have been payable if the deduction had not been claimed.

Faking rent receipts

👉The ITD has stepped up its scrutiny of rent receipts, and taxpayers who are caught submitting fake receipts could face severe penalties, including prosecution under the Income Tax Act, which could result in imprisonment.

– Taxpayers who claim false deductions for other expenses, such as donations, could face penalties of up to 100% of the tax that would have been payable if the deduction had not been claimed.

Claiming false deductions

– The ITD is urging taxpayers to be honest when filing their ITRs. Taxpayers who are unsure about whether they can claim a deduction for a particular expense should consult with a chartered accountant.

Filing late returns Taxpayers who file their returns late could face penalties of up to ₹5,000. The ITD has been cracking down on late filers, and the penalties for late filing are likely to increase in the future.

Making errors in returns Taxpayers who make errors in their returns could face penalties of up to ₹10,000. The ITD has a system for detecting errors in returns, and taxpayers who make errors are likely to be penalized.

Not paying taxes Taxpayers who do not pay their taxes on time could face penalties of up to 25% of the tax due. The ITD has a system for tracking down taxpayers who do not pay their taxes, and taxpayers who are caught not paying their taxes are likely to be penalized.