Massive IT Raids Target Bogus Tax Deductions in Political Donations, Medical Bills

The operation targets individuals and intermediaries exploiting tax exemptions through fraudulent claims for political donations, tuition fees, and medical expenses. This action, one of the largest of its kind, aims to curb the misuse of tax benefits under provisions like Section 80GGC of the Income Tax Act.

IT Crackdown on 200 Locations

Preliminary findings reveal a sophisticated network of intermediaries charging 5-10% commissions to generate fake bills for political donations, educational expenses, and medical reimbursements. These fraudulent claims, often submitted under the old tax regime, allowed taxpayers to illegally reduce their taxable income. Sources indicate that the raids, spanning cities like Mumbai, Delhi, Bengaluru, and Kolkata, were triggered by credible tip-offs and data analytics from the department’s NUDGE campaign, launched to flag unsupported deductions.

Locations Raided for Fraudulent Political Donation

The raids cover businesses, chartered accountants, and intermediaries suspected of facilitating these scams. Documents, digital records, and cash have been seized from locations including offices and residences. In Mumbai alone, 60 premises were searched, with similar operations in other major cities. The department is also investigating shell entities posing as charitable organizations to funnel fake donations, a tactic increasingly used to exploit tax exemptions.

Over 200 Premises under Scanner

The Income Tax Department’s aggressive action underscores its commitment to restoring transparency in tax filings. “This crackdown targets those undermining the system for personal gain,” said a senior official. The operation follows recent amendments tightening scrutiny of deductions, with penalties under Section 271AAD for falsifying records. The department is also leveraging AI-based tools to identify discrepancies in tax returns.