The Directorate of Income Tax (Investigations) has unearthed a massive income tax fraud worth over Rs 500 crore in Pune, exposing how tax professionals exploited loopholes in the return filing system to generate bogus deductions. Officials described it as the largest such scam in recent years, surpassing earlier cases involving manipulation of PAN, TDS credit, and fake trusts.
According to senior officers, a group of tax professionals operating in Pune and nearby regions positioned themselves as "return specialists" and lured salaried employees by promising unusually high refunds. Over the past five years, they filed more than 10,000 fraudulent claims by showing deductions on housing loans, medical and insurance payments, education loans, savings instruments and house rent allowance (HRA) all without valid documentation.
Investigators noted a consistent pattern across the returns, highlighting how the professionals exploited gaps in the earlier return filing system, which has since been tightened. "We have already initiated action against the tax professionals involved and are now identifying individual taxpayers who benefited from these bogus refunds," an officer said.
The department also warned that taxpayers cannot escape liability by shifting blame to intermediaries. "Any unlawful refund claimed in a taxpayer's name will be reviewed, and penalties and prosecution will apply," the officer added.
This crackdown is part of a wider effort to detect fraudulent practices across the country. Officials indicated that similar cases of bogus deduction claims are emerging in other regions as well, underlining the importance of stricter compliance and documentation in tax filings.
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