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Are you making the right claim of refunds in your Income Tax Return - Here are the key points which you are required to know before filing your Income Tax Return! Filing Of Income Tax Return Every person who is having income above the basic exemption limit not chargeable to tax or who is required
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FAQ :
Tax planning is the legal method of reducing tax liability through genuine claims of deductions and exemptions, supported by evidence. Tax evasion is an illegal method of reducing tax liability by making wrongful or bogus claims without any basis, which can lead to adverse consequences.
Wrongful refund claims are a concern because they artificially reduce an individual's tax liability, leading to the incorrect claiming of refunds on deducted TDS. The department uses AI/ML and data analytics to identify these high-risk claims.
Making wrongful refund claims can lead to detailed income tax scrutiny, disallowance of deductions, tax demands with interest, penalties of up to 200% of the tax on misreported income, and in severe cases, prosecution.
Employees who have made wrongful claims can file an Updated Return (u/s 139(8A)) to withdraw the incorrect claims and pay the additional tax due. This must be done before assessment or reassessment proceedings are initiated.
An Updated Return can be filed within two years from the end of the relevant Assessment Year. The additional tax payable varies depending on whether it's filed within 12 months or between 12 and 24 months.
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