IT Department Sending SMS for Deductions Claimed u/s 80GGC

The IT Department sending SMS alerts regarding the deduction claimed u/s 80GGC of the Income Tax Act i.e., against the political donations.

Deduction Claimed by Mistake

If you have actually not donated but claimed a deduction u/s 80GGC, you must:

• Revise your ITR immediately.
• Pay any additional tax and applicable interest.
• Return any excess refund received.

If you failed to correct this, it may lead to high risk of receiving a scrutiny notice from the IT Department

Fake Donations for Tax Evasion

It has also seen that some donate large sums to unrecognized political parties for receiving cash refunds.

The Income Tax Department is actively scrutinizing such fake political parties to curb this malpractices.

Such as:

₹110 Cr Tax Refund Scam via Fake Political Donations

Several Information Technology professionals from Hyderabad have come under IT Department's lens - claimed refunds by showing donations to unrecognised political parties (RUPPs).

The IT Department found a ₹110 crore refund scam involving 36 companies.

One case that caught the investigation attention was of employee with earning ₹46 lakh who claimed to have donated ₹45 lakh to a party.

Some parties accepted cheque/bank donations and then returned the money in cash after deducting a commission.

Ahmedabad RUPP Group Exposed in Political Donation Scam

On 7th September 2022 a search and seizer action u/s 132 of IT Act was conducted which targeted the Ahmedabad-based Registered Unrecognized Political Parties (RUPPs) group.

The main objective is to investigate the fraudulent financial activities, possibly including:

• Fake political donations.
• Tax evasion.
• Money laundering.

Which they Covered:

• 23 Registered Unrecognized Political Parties (RUPPs).
• More than 35 bogus intermediary entities.
• 3 major exit providers.

Donations made to legally recognized national and state political parties contesting elections are legitimate under Section 80GGC. Only genuine donations are eligible for tax deductions without the risk of scrutiny notices if taxpayer properly declared.