Massive Tax Refund Scam Busted: Income Tax Raids 18 Locations Across Tamil Nadu

The Income Tax Department has uncovered a major scam involving fake tax refund claims in Tamil Nadu. On July 14, 2025, officers carried out searches at 18 different locations across the state. The raids took place in cities such as Chennai, Coimbatore, Madurai, Salem, Tiruchy, Vellore, Erode, Tiruvannamalai, Villupuram, Theni, Sivagangai, Pudukkottai, Virudhunagar and Tirunelveli.

According to officials, several income tax agents and middlemen were found helping thousands of people to file false tax returns in order to get refunds that they were not actually eligible for. These agents used tricks such as making up fake deductions under different sections of the Income Tax Act.

According to The Economic Times, Some of the common fake claims included donations to political parties under Section 80GGC, medical expenses under Section 80D, school fees under Section 80C and house rent under Section 10, 13 A. These deductions were shown in the tax returns even though the taxpayers had not spent that money which resulted in many people getting refunds from the government that they should not have received.

The total amount of money taken through these fake refunds could be worth several crores of rupees. The scam is not limited to Tamil Nadu. People from other states such as Delhi, Jharkhand, Jammu and Kashmir, Assam and Bihar were also involved.

The middlemen promoted this scam using private WhatsApp and Telegram groups and by spreading the word informally. Many of the people who took part in the scam were government employees and even serving or retired members of the armed forces.

Investigators also discovered that some people created fake email accounts just to file these fraudulent returns. These email addresses were used to send in the returns and to collect the refunds. The Income Tax Department said that they found strong evidence of fraud during the investigation.

An official from the department gave a warning to the public. He said that people should not get involved in such dishonest activities. He also advised anyone who has filed a false tax return in the past or this year to come forward and file a corrected return. The department will help taxpayers update their information honestly without fear of punishment if they come forward on their own.

The investigation is still going on, and more people who were part of the scam may be identified and questioned soon.

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