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The Income Tax (I-T) Department has uncovered a large-scale racket involving return preparers and intermediaries who helped clients file fraudulent income tax returns (ITRs). These returns falsely claimed deductions and exemptions. Following department outreach, around 40,000 taxpayers have revised their filings, withdrawing bogus deductions totalling ₹1,045 crore over the past four months.
HRA and LTA: Heavily Misused
One of the most exploited provisions is Section 10(13A), which permits exemption on house rent allowance (HRA). “Taxpayers often submit fabricated rent receipts or falsely declare parents or relatives as landlords to their employers to claim HRA exemptions,” says Preeti Sharma,
