'CAs' help you get fat income tax refunds - Fraud Alert

   'CAs' help you get fat income tax refunds- Fraud Alert

As the July 31 deadline for filing income tax returns looms, some taxpayers are discovering that this can be an enriching affair. They have been promised fat tax refunds by conmen masquerading as chartered accountants. This is easy because no documents have to be submitted to support deductions or exemptions claimed in an income tax return. “One can claim a deduction for medical insurance, home loan or education loan or even disability of self or dependent without having to submit any evidence”.

However, tax experts warn that the discrepancy is likely to get detected when the return comes up for assessment. Until recently, tax deducted at source (TDS) details in an individual’s Form 26AS used to be reconciled with the tax declared in the return. “Now the tax department is also checking the Form 16 and reconciling it with the income declared in the return,” said CA Sumit Nigam Partner of PD Garg and Co., Gwalior.

Normally, if there is a mismatch in the income details, the return is rejected and the assessee is given a chance to rectify the mistake. But wilful falsification of information can have serious implications.

“If a taxpayer has knowingly claimed a deduction or exemption and does not have the required documents, it is tantamount to tax concealment,” said CA Snigdha Nigam, Snigdha & Associates. “Under Section 270A, misreporting of income attracts a penalty of 200% of the tax sought to be evaded.”

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