Quick Summary
The Income Tax Department has uncovered a tax evasion attempt involving forged improvement bills submitted to claim false deductions under capital gains. The case pertains to a Hyderabad-based taxpayer who sold an immovable property for Rs 1.4 crore. However, in his Income Tax Return (ITR), he reported an unusually low Long-Term Capital Gain (LTCG) of just Rs 24,774, after claiming inflated deductions under 'cost of improvement with indexation' amounting to Rs 68.7 lakh, in addition to an index
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FAQ :
The department detected tax evasion by using AI-powered font analysis on improvement bills submitted for capital gains deductions. They found a bill used a font that was not publicly released in the year it was dated.
The taxpayer claimed inflated deductions for 'cost of improvement with indexation' and 'indexed acquisition cost' on an immovable property sale to reduce his reported Long-Term Capital Gain.
The bill in question was found to be typed in the Calibri (Body) font, which was released publicly in 2006, but the bill was dated July 6, 2002.
The taxpayer admitted the documents were photocopies from his late father's belongings, withdrew the cost of improvement claim, filed a revised return, and paid the applicable taxes.
AI tools are being used to analyze metadata, fonts, image inconsistencies, and document structures to detect subtle discrepancies in tax documents that might be missed by manual checks, especially in high-value transactions.
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