The Income Tax Department has started strong action against tax evaders. The department has resorted to Artificial Intelligence (AI) and Advanced Data Analytics to demolish the tax evasion network spread across the country. This time there are people and institutions on the target, who were taking wrong advantage of tax exemption through fake documents. On Monday, the department raided more than 200 people and organizations in different parts of the country, which were helping taxpayers tax theft in the name of fake donation, tuition fees and medical expenses.
Tax evasion game being caught from AI
The Income Tax Department has made technology its biggest weapon this time. With the help of AI and data analytics, taxpayers were identified, who were getting tax exemption by depositing fake documents. Especially some provisions of the Income Tax Act have been misused. Among them, house rent allowance (HRA) i.e. section 10 (13A), Donation (13A), Donation (Section 80GGC), Education Loan Interest (Section 80E), Health Insurance Premium (Section 80D), Home Loan and Electric Vehicle Loan Interest (Section 80EE and 80EEEB), Charitable Donation (Section 80EEB), Scientific Research (Section 80GGA) and the cost of treating serious diseases (section 80DDB) are included.
AI caught these fake claims by matching data from banks, employers, donation databases and other third-party sources. This technology not only targeted small taxpayers, but also exposed the big organized rackets that were preparing fake documents for tax evasion. The department found that many taxpayers, with the help of some professional intermediaries, were exaggerating or completely fake claims without any basis to reduce their tax liability.
➡️The Income Tax Department has launched a large-scale crackdown on fraudulent claims of deductions and exemptions in income tax returns (ITRS). Organized Rackets, False Filings, and Misuse of Beneficial Provisions are under scrutiny.
➡️this large-scale verification follows pic.twitter.com/ctozblbdca
– Income Tax India (@Inometaxindia) July 14, 2025
Fake net opened in raids
On Monday, the Income Tax Department conducted raids together across the country. More than 200 people and institutions were on target in this operation. These were the people who were helping taxpayers in taxpost by making fake documents like fake donation, tuition fees and medical bills. The department found that some organized rackets were training taxpayers to save tax in the wrong way. These rackets not only made fake documents, but also prepared a paperwork of fake donation through non-ruled or suspected institutions.
Especially under section 80GGC, there was a fierce misuse of tax exemption on donation given to registered political parties. Many taxpayers showed donation to such institutions, which were not either registered or who had no real existence. Apart from this, tax exemption claims were also made through fake tuition fees and medical bills. The department seized several such documents in these raids, which were completely forged.
Warning first, now action started
Prior to this big crackdown, the Income Tax Department started a campaign called Nudge. The purpose of this campaign was to warned the taxpayers about their suspects and without documents. The department had advised the taxpayers to re -examine their returns and file revised or updated returns if there is any mistake. Due to not doing so, taxpayers may have to face legal action under notice, penalty, interest or Income Tax Act.
Under the NUDGE campaign, the department informed the taxpayers through messages and emails about their wrong claim. Many taxpayers corrected their returns after this warning, but strict action has now started against those who did not agree. The department says that this campaign was started to stop tax evasion and bring taxpayers on the right path, but now the time has come to take strictness.
Section 80GGC and fake donation fraud
Section 80GGC is one of those provisions that were most misused. Under this, there is a tax exemption on the donation given to registered political parties. But the department found that many people and institutions were taking wrong advantage of this exemption by making fake donations papers. In some cases there were political parties which had no office or activity. These parties were only on paper and through them, fake receipts were being given to taxpayers.
Similarly, fake bills were also made in the name of tuition fees and medical expenses. Many taxpayers exaggerated the tuition fees of their children, while in some cases fake bills were deposited in the name of medical expenses. The department caught these disturbances by matching third-party data such as school records, hospital bills and insurance data in these cases.
Strict warning for taxpayers
The Income Tax Department has given a clear warning to the taxpayers that if they have made any claim without the correct documents, then fix it immediately. The department has said that taxpayers can avoid penalty and legal action by filing revised returns. But if they do not do so, then they may have to face punishment under notice, heavy penalty, interest and Income Tax Act.
The department has also said that the crackdown of this time is just the beginning. In the coming days, more people and institutions will come under its control. Especially those professional intermediaries are being monitored, who are helping taxpayers by giving incorrect advice to taxpayers.
CA and tax professionals also instructed
The Income Teaches Department has made it clear that this cracked is not going to stop. There may be more raids in the coming days. The department is trying to break all the networks that are involved in tax evasion. Also, taxpayers are being warned repeatedly to fix their returns.
Apart from this, the department has also appealed to tax professionals and chartered accountants to avoid giving wrong advice to their clients. The department says that if any professional tax evasion is found helping, then strict action will also be taken against him.
The correct document is necessary
The Income Tax Department has appealed to the taxpayers to keep the right documents before claiming any claim. Whether it is house rent allowance, donation, medical expenses or tuition fees, it is necessary to have valid proof for every claim. The department said that with the help of AI and data analytics, every claim is now being investigated in depth. In such a situation, if someone claims wrong, then it is sure to be caught.