Income tax department launches searches across Tamil Nadu over bogus refund claims

CHENNAI:

Income Tax department has launched coordinated search operations across Tamil Nadu as part of a widening probe into a network of intermediaries and tax practitioners allegedly involved in orchestrating fraudulent income tax refund claims worth several crores of rupees.

Surveys are being conducted at 18 locations—including Trichy, Coimbatore, Salem, Madurai, Chennai, Vellore, Erode, Tiruvannamalai, Villupuram, Theni, Sivagangai, Pudukkottai, Virudhunagar and Tirunelveli—targeting agents and practitioners who are suspected of facilitating fake deduction claims under various provisions of the Income Tax Act. The crackdown comes amid concerns over systemic abuse of tax benefits by thousands of individuals, including government employees and military personnel.

Preliminary findings suggest the existence of a sprawling network of operators who assisted clients in inflating or fabricating deductions under sections such as 80GGC (political donations), 80D (medical insurance), 80C (tuition fees), and HRA exemptions under section 10(13A), among others. Investigators believe this enabled taxpayers to illegitimately claim refunds, defrauding the exchequer.

The operation, which spans urban and semi-urban centres has yielded "incriminating evidence" pointing to the use of dedicated email accounts to file thousands of fraudulent tax returns. Authorities suspect that these agents canvassed clients—some reportedly from as far as Delhi, Assam, Bihar, and Jammu and Kashmir—via private messaging platforms such as WhatsApp and Telegram.

The quantum of fake refunds claimed is believed to run into several crores of rupees, although the full scale of the fraud is still being assessed. Several of these agents targeted vulnerable and uniformed taxpayers, promising high refunds for a fee.”

The Department has urged individuals who may have submitted inaccurate returns in the current or previous financial years to come forward voluntarily and file updated or revised returns. Officials hinted that taxpayers who do so may be spared punitive measures, including penalties and prosecution.

In a cautionary note, the tax authority warned citizens against falling prey to fraudulent schemes promoted by unscrupulous intermediaries. It has pledged assistance to those willing to correct past filings and reiterated its commitment to “restoring the integrity of the tax system.”