The Income Tax Department has decided to be strict in cases of big refunds. Now incorrect refunds can be recovered from previous years also. Suspicious returns are being investigated with the help of Artificial Intelligence, while taxpayers filing returns through non-professionals need to be careful.
The Income Tax Department has decided to conduct strict investigation in cases of large refunds. There are chances of refunds getting stuck this year, as well as recovery of refunds wrongly received in previous years. The Central Board of Direct Taxes (CBDT) has issued new instructions in this regard.
Start of micro investigation
The Income Tax Department has started micro scrutiny of taxpayers whose returns came under scrutiny in the last eight years. This also includes employed people who have filed returns en masse.
Increasing complaints of wrong refunds
After cases of fake donation receipts and expenses by government employees of Jammu and Kashmir and Andhra Pradesh came to light, the Income Tax Department decided to be strict in refund cases. Cases of such wrong refunds were also detected in Ujjain.
Use of Artificial Intelligence
CBDT has directed that suspicious returns and refunds will be identified using Artificial Intelligence. After filing returns, refunds of many taxpayers are stuck for months, mainly due to investigation instructions.
Possibilities of recovering refund
According to CA Swapnil Jain, the Income Tax Department has the right to recover the refund of the last four years if a wrong claim is caught by a taxpayer.
Caution from non professionals
Most of the taxpayers are getting returns filed by non-professionals, who are working without any official qualification. These people are trapping the taxpayers by luring them to get more refunds. One needs to be careful in such cases as there is a possibility of claiming exemptions for which they are not eligible.
