In a sweeping action launched on July 14, 2025, the Income Tax Department (ITD) executed simultaneous search-and-seizure operations at over 200 locations across India. These raids targeted tax practitioners, chartered accountants, intermediaries, and individuals suspected of facilitating bogus tax deduction claims.
1. Scale & Scope
- 200+ premises were raided in cities like Mumbai, New Delhi, Chennai, Hyderabad, and Patna.
- The focus was on fake claims under:
- Political donations (Section 80GGC)
- Medical expenses and insurance (80D, 80DDB)
- Tuition fees and education loans (80C, 80E)
- House Rent Allowance (10(13A)) and home-loan interest
- Operations were conducted across Maharashtra, Tamil Nadu, Delhi, Gujarat, Punjab, Madhya Pradesh, Telangana, Andhra Pradesh, and more.
2. Modus Operandi Uncovered
- Intermediaries, including tax practitioners and CAs, prepared fraudulent returns in bulk using temporary email IDs and promised inflated refunds in exchange for commissions.
- Fake political parties and NGOs were set up in slum areas to channel donations that were rerouted back in cash, keeping a cut.
- Similar scams were applied to false bills related to medical costs, tuition, EV loans, and HRA.
3. Financial Impact
- In the Nagpur zone alone, about 9,000 ITRs were flagged with bogus claims worth ₹100 crore.
- Tamil Nadu witnessed over ₹500 crore in fake refunds identified across 19 districts.
- A separate ₹250 crore political donation scam in Aurangabad involved a chartered accountant using shell parties.
4. Compliance‑Driven Resolution
- Under the NUDGE campaign, taxpayers received alerts via SMS, email, and outreach drives, urging voluntary correction.
- Around 40,000 taxpayers corrected their returns and withdrew false claims totaling over ₹1,045 crore in the last four months.
5. Enforcement & Future Outlook
- The IT Department has signaled strict penalties and prosecution for continued non-compliance.
- This crackdown is backed by advanced analytics, AI, third-party financial data, and intelligence reports.
- The raids are aligned with broader fiscal reforms under the 2025 Union Budget, which emphasized cleaner compliance and simplification of tax procedures.
Why This Crackdown Matters
- Restoring Tax Integrity
These actions show that the government will not tolerate the misuse of taxpayer-friendly laws meant to encourage social welfare and genuine relief. - Accountability in the Profession
The spotlight is on tax professionals, with unethical behavior now bringing real consequences. Those found facilitating fraud could face suspension, license cancellation, and legal proceedings. - Encouraging Voluntary Compliance
With programs like NUDGE, the ITD is balancing strict enforcement with proactive education and outreach.
What Taxpayers Should Do Now
- Review your ITRs, especially if you’ve claimed deductions for donations, medical bills, HRA, or education expenses.
- Amend unsupported or inflated claims before further scrutiny arises.
- Retain authentic documents and receipts for all deductions claimed.
- Choose only qualified, ethical tax advisors to avoid falling into legal trouble.
Written by Shriyanshi Shukla
LinkedIn: www.linkedin.com/in/shriyanshi-shukla
Email: info@maatifarms.com
