ITR filing: Lied in your tax return? You are responsible, not your ITR preparer and here's how to save you

Ashish Kumar did not believe his ears when a friend told him about the huge tax refund he received last year. "The tax professional who had refunded him charged him 15% of the amount as a fee," he says. This year, Kumar also tried his luck and sent his 16 form and other details to the tax preparer. Indeed, a few days later, he received a confirmation from the tax department that his tax return had been filed. Upon return, Kumar had claimed a refund of more than Rs 50,000.

It is there that the story becomes cloudy. The tax preparer had filed Kumar's report deflating his gross income of Rs 1.65 lakh, which resulted in the repayment of more than Rs 50,000. The "professional" claimed to have taken into account certain allowances who are exempted under Article 10 but who were not mentioned in Kumar Form 16. According to Form 16, Kumar's income was 14.85 rupees. lakh in his tax return.

Kumar was very excited at the prospect of getting a refund of Rs 50,000. But his joy turned into despair after he spoke to some tax experts. "Starting this year, tax forms require a taxpayer to give a break to the various exemptions claimed in the return," said a chartered accountant based in Delhi. The return of Kumar will obviously distort the exemptions. The gap is likely to get noticed when his return is badessed by the tax department. The Computer Assisted Control System (CASS) will immediately indicate that there is a case of underreporting. "The tax preparer has no skin in this game. It will be the taxpayer who will have to explain when the tax department will send him an opinion," says the chartered accountant.

Thousands of taxpayers like Kumar may have already filed incorrect tax returns with incorrect information. Conmen posing as tax professionals falsify information in the tax return, resulting in heavy tax refunds ranging from Rs 50,000 to Rs 2 lakh. They do this by underestimating the taxable income of the individual or by claiming certain tax deductions and exemptions.

No Document in the Online Filing

This is easy because no document should be submitted to support the deductions or exemptions claimed on a tax return. "One can claim an exemption for housing allowance and deduction for medical insurance, home loan, study loan or even disability without having to submit evidence," says one accountant based in Mumbai.

However, tax experts warn that fraudulent claims of deductions and exemptions could have serious implications if the return is resumed for review. "If a taxpayer knowingly claimed a deduction or an exemption and that he did not have the documents required to support his claim, this amounts to a tax concealment." Section 270A, the misrepresentation of income entails a penalty of 200% of the tax that one seeks to avoid, "said Amit Maheshwari, partner, Ashok Maheshwary & Associates.

For its part, the tax service now puts all claims under the scanner. "Most of the exemptions provided for in section 10, including long-term and medical benefits, can only be claimed by submitting proof of expense to the employer," says Archit Gupta, founder and CEO of Cleartax.in. In addition, you can not claim an allowance on your own. "One can claim an exemption only if the allowance is given by the company and mentioned in Form 16," says chartered accountant Karan Batra. But the exemption for certain allowances such as HRA can be claimed even at the tax filing stage. "If the employee fails to submit evidence by the deadline set by the company, he may apply for an HRA exemption in the ITR," says Batra. However, the taxpayer must submit the landlord's PAN if the HRA exemption claimed is more than Rs 1 lakh in a year. If a taxpayer claims a very strong exemption for HRA, the ministry will also see if the owner (whose PAN has been mentioned) has paid tax on the rent received.

Of course, a taxpayer who does not receive HRA as part of the salary may claim an exemption for rent paid under Article 80GG. However, this benefit has certain prerequisites and is capped at Rs 5,000 per month (Rs 60,000 per annum).

The badessment itself has become stricter. Until recently, the details of the TDS in a person's 26AS form were reconciled with the tax reported in the statement at the time of the valuation. "Now the tax department is also checking form 16 and reconciling it with the income reported in the return," says Sudhir Kaushik, chief financial officer and co-founder of the tax reporting portal Taxspanner.com.

Claiming False Deductions

The deductions in Chapter VI-A are a fertile area for fraudulent claims. Some taxpayers are unable to complete their tax planning before the March 31st deadline. Others do not have enough cash to invest in tax savings. But they can still claim the full amount of Rs 1.5 lakh under section 80C and Rs 25,000-55,000 under section 80D for medical insurance. Some deductions may be important, such as Rs 1.25 lakh for severe self-disability (section 80U) or dependent (section 80DD).

Tax experts warn that it has become easier for the department to detect fraudulent claims. "The number of Aadhaar people is now in every financial transaction, so there are ways for the tax department to know if you have actually purchased the medical insurance policy for which you claimed a deduction in under section 80D, "says Shubham Agarwal, Senior Tax Advisor, Taxfile.in.

Making a fraudulent gift
] A major area of ​​tax fraud is the donation to charities under section 80. Under this provision, a taxpayer donates an amount to a charitable organization eligible for the deduction under section 80G The amount is refunded to the taxpayer in cash The taxpayer earns by claiming a deduction for the amount paid while the charity earns by converting donations into unrecognized cash into legitimate money.The deduction is usually 50 % of the amount donated.So, if a person in the highest tax bracket of 30% donates Rs 1 lakh, he will be able to claim a deduction of Rs 50,000 which will reduce his tax by Rs 15 450. It's a great thing that thousands of taxpayers use every year

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Each year, nearly 3-5% of returns are selected for review. Although this is a random selection, the CASS also has other parameters that can result in scrutiny. "The data badysis capacity of the tax department is increasing every day and is already quite important," says Maheshwari.

If your return is rejected

Normally, if there is a discrepancy in the details of the income, the statement is rejected and the contributor has the opportunity to rectify the error, but deliberate falsification of information may have implications. "If the appraiser finds malafide intent to report the income erroneously, he may impose a penalty and file a lawsuit against the taxpayer," said Raj Khosla, chartered accountant and general manager of MyMoneyMantra.com .

"Fraudulent refund claims have become a big problem for the Income Tax Department," says Batra Chartered Accountant. Earlier this year, a tax refund racket was broken in Bangalore. A tax advisor filed claims for nearly 1,000 employees of large corporations with inflated claims of real estate loss. Sources in the Tax Department say that they have recently uncovered a similar scam involving income tax returns from defense personnel.

How to revise your tax return

If, like Ashish Kumar, you have also filed your return with inaccurate information, you can make amends by filing a revised return. The tax department allows taxpayers to revise their returns in case they make a mistake. The revision of the statement should be a child's play if you have not verified your statement after filing by posting the ITR-V to CPC in Bengaluru or using your Aadhaar for electronic verification . Even if this has been verified, you can still file again.

It is best to use the services of an appropriate tax advisor this time so that your return is perfect. For the current taxation year, a revised return may be filed until March 31, 2019 or until the return has been badessed, whichever comes first. In addition, there is no limit to the number of times that one can revise one's tax return.

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How to file a revised return

Here is how to proceed:

Fill out an online form and mention that it is a revised declaration under section 139 (5). You will also need to mention the 15-digit acknowledgment number and the filing date of the original return. The new statement may be filed by any electronic filing portal, no matter how the original was filed.

Fill out the correct income and other details in the form, and then follow the same procedure as used for the previous statement. Include all income you have earned during the year (FD, NSC and savings bank interest) and include any deductions you were eligible for. Do not forget to send the ITR-V report of the revised return to CPC in Bangalore.

In all of this, remember that you are in the safe zone until you do it voluntarily. Once your appraiser has detected an error (or a deliberate misstatement), do not expect to receive leniency.