CBDT Targets Bogus Deduction claims, Selected Taxpayers to get SMS and E-mails
The board has advised taxpayers to ensure that their mobile numbers and email IDs are correctly updated in income tax records to avoid missing official communications.
The Central Board of Direct Taxes ( CBDT ) has begun up its checks on fake donation claims made to political parties and charitable trusts after finding widespread misuse of tax deduction provisions under the Income Tax Act, 1961.
Several intermediaries were found to be filing Income Tax Returns (ITRs) with fraudulent deductions and exemptions on behalf of taxpayers, and the CBDT started legal action against them as part of an enforcement action.
According to the investigations, these middlemen filed forms on a commission basis and ran large agent networks throughout the nation, allowing individuals to fraudulently claim refunds and illegally lower their tax liabilities.
The Department found that quite a few fraudulent statements had to do with contributions to certain charitable organizations and Registered Unrecognized Political Parties (RUPPs). Many of these RUPPs were found to be non-filers, non-operational at their registered addresses, and not involved in any legitimate political activity through enforcement operations.
Rather, they were allegedly utilized as conduits for hawala transactions, cross-border remittances, the transportation of unaccounted funds, and the issuance of fictitious donation receipts to support fraudulent deduction claims.
Based on these findings, follow-up searches were conducted on select RUPPs and trusts, leading to the recovery of incriminating evidence relating to bogus individual donations and false Corporate Social Responsibility (CSR) claims by companies.
The board has taken initiative to curb the bogus deduction claims. Many taxpayers have already filed updated returns for previous years and changed their taxes for the current Assessment Year 2025-2026 as a result of this targeted data intervention.
The CBDT has begun a focused "NUDGE" campaign as a taxpayer-friendly plan, allowing taxpayers the chance to voluntarily examine and rectify false claims. As part of this campaign, selected taxpayers will get email and SMS notifications on their registered contact details starting on December 12, 2025, requesting that they take corrective action prior to the implementation of stricter penalties.
The board has advised taxpayers to ensure that their mobile numbers and email IDs are correctly updated in income tax records to avoid missing official communications.
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