Income Tax Department Clarifies Misinformation Regarding HRA Claims

Income Tax Department has addressed concerns raised by taxpayers regarding certain discrepancies in the information provided to the department. These discrepancies were identified during routine verification exercises conducted by the department.

The department has clarified that there is no basis for apprehensions regarding retrospective taxation or the reopening of cases related to incorrect claims of House Rent Allowance (HRA) and rent paid by employees.

Central Board of Direct Taxes (CBDT) has noted instances where there were discrepancies between the rent paid by employees and the receipts of rent by the recipients for the financial year 2020-21.

It’s important to note that this verification process was carried out in a limited number of cases and did not involve the reopening of a large number of cases. This is particularly significant as taxpayers had the opportunity to file updated returns for the financial year 2020-21 (Assessment Year 2021-22) until March 31, 2024.

The primary objective of this e-verification exercise was to bring attention to cases where there were mismatches in information for the financial year 2020-21, without impacting other cases.

IT Department has reiterated that there is no ongoing special drive to reopen such cases. Reports in the media suggesting otherwise are inaccurate.

Taxpayers are urged to remain vigilant and ensure accuracy in their tax filings. The Income Tax Department remains committed to fair and transparent tax administration, and any concerns or inquiries from taxpayers are being addressed accordingly.

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