Income Tax Refund: The Income Tax Department has warned that filing a fraudulent claim could result in a 200% penalty. Taxpayers who provide false information will not receive a refund and could face criminal prosecution.
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Income Tax Refund: If you have made some fake or wrong claim in the hope of getting a higher refund, then the Income Tax Department can impose a penalty on you. The Income Tax Department has clearly indicated that if anyone tries to increase the refund by giving false information, then he will not get the refund. Not only this, a penalty of 200 percent will also be imposed on him.
Actually, in the last few months, the Income Tax Department has found in its investigation that some agents, from salaried employees to freelancers, have made them fill false deductions in their ITR in the greed of higher refund. Now the Income Tax Department is taking action on all those files.
Who will be fined and how much?
Under Section 270A of the Income Tax Act, underreporting, or underreporting, can result in a penalty of up to 50%. However, misreporting, or deliberately providing false information, can result in a penalty of up to 200% of the tax. In many cases, this also includes a 24% annual interest charge and the possibility of criminal prosecution under Section 276C, which could result in a fine and even imprisonment.
Taxpayers give these excuses
The Income Tax Department stated that taxpayers often offer various excuses after being caught making false claims. However, arguments like “the agent did it” or “the CA gave wrong advice” will no longer serve as a defense for taxpayers. According to the law, the taxpayer’s name appears on the return, so he or she bears full responsibility for any incorrect information and is liable for penalties or imprisonment.
The Finance Ministry has launched a targeted “NUDGE” campaign, which is providing taxpayers with the opportunity to update their ITRs and remove any incorrect claims. Such taxpayers will receive SMS and email advisories to their registered mobile numbers and email IDs starting December 12, 2025. If you are one of those individuals, you will also receive an alert message.
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