how IT department identifies fake rent receipts: Every taxpayer can try to save tax by staying within the ambit of Income Tax law. Whether it is the old method or the new one, both provide many options to save tax. But those who adopt wrong methods to save tax are in trouble now. For example, some people file tax returns by making fake receipts. They think that they can fool the Income Tax Department. But in the age of AI, the Income Tax Department has very good techniques to catch such fake methods. 31 July 2024 is the last date for filing income tax returns, so it is important to know how the Income Tax Department catches fake rent receipts.
With the help of AI: The Income Tax Department is now detecting fake rent receipts using artificial intelligence (AI). It does this by combining Form-16, AIS Form and Form-26AS.
AI Verification: You get tax exemption on HRA received on rent, but for this you have to show the correct rent receipt. Now the Income Tax Department is using artificial intelligence (AI) to find out whether you are saving tax by showing fake receipts.
What are the HRA Rules?: To show HRA as a deduction, it is first necessary that your company pays you HRA. If the rent paid for the whole year is more than ₹ 1 lakh, then the PAN number of the landlord also has to be given. The Income Tax Department then matches the HRA mentioned by you with the transactions related to the landlord’s PAN, which are recorded in the AIS form. If any difference is found between the amount stated and the recorded transactions, then the department can send you a notice.
No tension if rent is less than Rs 1 lakh: If you pay rent of less than Rs 1 lakh in a year, then it is not necessary to disclose the PAN of the landlord. In such cases, the Income Tax Department usually does not investigate HRA claims up to Rs 1 lakh.
AI is catching fraud: Many people adopt fraudulent methods to take advantage of HRA. This is because if you show more rent, you do not have to pay tax on that amount. Due to this greed, some people submit fake receipts, thinking that they will not be caught. But, the AI systems of the Income Tax Department have now become quite capable of catching such frauds and the department sends notices in such cases.
