The Ministry of Finance released details on Saturday that the Central Board of Direct Taxes (CBDT) has taken action against many intermediaries who were helping people file income‑tax returns with fraudulent claims of deductions and exemptions. The investigation uncovered a widespread network of agents across India who submitted incorrect returns for their clients, charging a commission for the service.
According to the ministry, “It was observed that huge amount of bogus claims have been made on account of donation to Registered Unrecognised Political Parties (RUPPs) or Charitable Institutions and reduced their tax obligations and have also claimed bogus refunds.” The evidence shows that many RUPPs—often non‑filers or inactive at their registered addresses and not involved in political activity—have been exploited as fronts for money‑laundering, hawala transactions, cross‑border remittances, and the creation of fake receipts for donations.
The CBDT conducted follow‑up searches on several of these RUPPs and related trusts, amassing proof of false donations from individuals and fabricated CSR claims by companies. To counter such abuse, the regulator has sharpened its data‑driven strategy, now able to detect suspicious claims early and spot patterns of high‑risk behaviour. One identified risk pattern involves taxpayers filing under sections 80GGC or 80G of the Income Tax Act, many of whom appear to seek deductions for contributions to dubious entities or fail to supply the necessary details to confirm the legitimacy of those recipients.
A significant number of taxpayers have already amended their returns for the current assessment year (AY 2025‑26) and re‑filed earlier ones. To encourage corrections, the ministry says, “A targeted ‘NUDGE’ campaign has been launched as a taxpayer‑friendly measure, providing them the opportunity to update their ITRs and withdraw wrong claims, if any.” From 12 December onward, SMS and email alerts have been sent to registered mobile numbers and email addresses, reminding taxpayers to keep these contact details current so they receive all future communications.
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