ITR Filing: To save income tax, many people smartly use fake rent receipts. People think that the income tax department will not come to know, but it is not so. The income tax department also sees all this and now it has started cracking down on such people. Let us know how the income tax department catches ITRs with fake rent receipts and sends notices.
Frauds are caught with AI
The Income Tax Department is using Artificial Intelligence i.e. AI. The Income Tax Department is catching fake rent receipts with the help of AI. For this, it matches Form-16 with AIS Form and Form-26AS.
The difference comes to the fore
All the transactions related to PAN card are recorded in AIS form and Form-26AS. In such a situation, when a taxpayer claims house rent allowance through rent receipt, the Income Tax Department matches his claim with these forms. If there is any increase or decrease, the difference is immediately visible. This entire process is done automatically and in a jiffy by AI.
When is it necessary to provide the landlord’s PAN?
There is a rule related to House Rent Allowance i.e. HRA that an employee can claim deduction of HRA only if he is getting HRA from the company. At the same time, if the employee pays rent of more than Rs 1 lakh, then he will also have to provide the PAN number of his landlord.
Matching claim amount with PAN
The Income Tax Department matches the amount you claim under HRA with the amount sent to your landlord’s PAN number. If a difference is found between the two, a notice is sent by the Income Tax Department.
Up to what amount of rent is there no inspection?
If your company gives HRA and you are claiming annual rent of less than Rs 1 lakh, then you do not have to provide the PAN of your landlord. In this case, you can claim HRA up to Rs 1 lakh, which will not even be checked by the Income Tax Department whether it is correct or fake.
Why fraud in HRA?
The biggest reason for fraud related to HRA is that it saves tax on a lot of income. However, from next year, in the new tax system, income up to Rs 12 lakh will be tax free with rebate, so perhaps the scope of HRA will also decrease and due to that, fraud can also be reduced.
