I-T dept flags ₹5,500 cr in suspicious political donation-linked tax claims

The Income Tax department has flagged over ₹5,500 crore in suspicious donation-linked tax deductions after nationwide verification and enforcement actions linked to registered unrecognised political parties (RUPPs), government sources said.

 

The actions were carried out on July 14 across 150 premises, during which more than 102 RUPPs were identified as suspicious for their alleged role in facilitating bogus donations used to claim tax deductions.

 

Investigations found that intermediaries were advertising “guaranteed refunds” in cinema halls and on social media platforms, luring taxpayers into making non-genuine claims in return for a commission, the sources said. In one case, a syndicate of professionals was found operating through WhatsApp and Telegram channels to connect taxpayers seeking to reduce their tax liability with RUPPs or certain charitable organisations issuing questionable donation receipts.

 

The probe also uncovered misuse of corporate social responsibility (CSR)-linked trusts, which allegedly issued bogus donation receipts in exchange for cash-back, undermining both corporate governance norms and rules governing political funding, according to the sources.

 

Data analytics by the department flagged over two lakh taxpayers who claimed suspicious deductions under Section 80GGC of the Income-tax Act, aggregating nearly ₹5,500 crore routed through suspicious or non-existent RUPPs. A similar amount of bogus donations was also detected in the case of non-genuine charitable organisations, the sources added.

 

The enforcement action has already prompted reversals of ineligible claims. About 54,000 taxpayers have corrected their filings and withdrawn bogus deductions worth around ₹1,400 crore by updating their returns. Most of these cases involved claims below ₹5 lakh, though a few companies were found to have claimed very large deductions, the sources said.

 

Separately, the Election Commission of India (ECI) has initiated a systematic delisting of non-existent, non-compliant or inactive RUPPs. So far, 808 such parties have been delisted, with the ECI taking cognisance of the mushrooming of politically dormant RUPPs.

 

It was further learnt that the Central Board of Direct Taxes (CBDT) has prepared a detailed analytical report capturing the findings, trends, modus operandi and revenue implications, and shared it with field formations to enable coordinated enforcement and compliance action.