{"id":29061,"date":"2025-03-29T01:25:10","date_gmt":"2025-03-28T19:55:10","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=29061"},"modified":"2025-12-16T23:32:50","modified_gmt":"2025-12-16T18:02:50","slug":"scrutiny-on-section-80g-donations-hra","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/scrutiny-on-section-80g-donations-hra\/","title":{"rendered":"Tax Dept intensified scrutiny on Section 80G donations &#038; HRA"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e141a8ad67c\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e141a8ad67c\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/scrutiny-on-section-80g-donations-hra\/#Tax_Dept_intensified_scrutiny_on_Section_80G_donations_HRA_exemptions\" title=\"Tax Dept intensified scrutiny on Section 80G donations &amp; HRA exemptions\">Tax Dept intensified scrutiny on Section 80G donations &amp; HRA exemptions<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/scrutiny-on-section-80g-donations-hra\/#False_House_Rent_Allowance_HRA_Claims_Section_1013A\" title=\"False House Rent Allowance (HRA) Claims (Section 10(13A)):\">False House Rent Allowance (HRA) Claims (Section 10(13A)):<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/scrutiny-on-section-80g-donations-hra\/#Other_Areas_of_Investigation_Fraudulent_Claims_Identified\" title=\"Other Areas of Investigation &amp; Fraudulent Claims Identified\">Other Areas of Investigation &amp; Fraudulent Claims Identified<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/scrutiny-on-section-80g-donations-hra\/#Repercussions_of_Failing_to_Deduct_TDS_on_Rent\" title=\"Repercussions of Failing to Deduct TDS on Rent:\u00a0\">Repercussions of Failing to Deduct TDS on Rent:\u00a0<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/scrutiny-on-section-80g-donations-hra\/#What_are_the_potential_consequences_for_taxpayers_employers\" title=\"What are the potential consequences for taxpayers &amp; employers?\u00a0\">What are the potential consequences for taxpayers &amp; employers?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/scrutiny-on-section-80g-donations-hra\/#What_next_steps_should_taxpayers_take\" title=\"What next steps should taxpayers take?\">What next steps should taxpayers take?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/scrutiny-on-section-80g-donations-hra\/#CBDT_Launches_Nationwide_Crackdown_on_Fake_Donation_Deductions\" title=\"CBDT Launches Nationwide Crackdown on Fake Donation Deductions\">CBDT Launches Nationwide Crackdown on Fake Donation Deductions<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/scrutiny-on-section-80g-donations-hra\/#CBDTs_Warning\" title=\"CBDT\u2019s Warning\">CBDT\u2019s Warning<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/scrutiny-on-section-80g-donations-hra\/#CBDT_Advisory_to_Taxpayers\" title=\"CBDT Advisory to Taxpayers\">CBDT Advisory to Taxpayers<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-29062\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/03\/high.jpg\" alt=\"Tax Dept intensified scrutiny\" width=\"966\" height=\"594\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/03\/high.jpg 800w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/03\/high-300x185.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/03\/high-768x472.jpg 768w\" sizes=\"(max-width: 966px) 100vw, 966px\" \/><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"Tax_Dept_intensified_scrutiny_on_Section_80G_donations_HRA_exemptions\"><\/span><span style=\"color: #000080;\">Tax Dept intensified scrutiny on Section 80G donations &amp; HRA exemptions<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The Income Tax Department&#8217;s intensified scrutiny on Section 80G donations and HRA exemptions under Section 10(13A) highlights the need for taxpayers to be extra vigilant in ensuring compliance.<\/p>\n<h3 data-start=\"895\" data-end=\"961\"><span class=\"ez-toc-section\" id=\"False_House_Rent_Allowance_HRA_Claims_Section_1013A\"><\/span><span style=\"color: #000080;\"><strong data-start=\"897\" data-end=\"959\">False House Rent Allowance (HRA) Claims (Section 10(13A)):<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-23738\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/HRA-examption-.jpg\" alt=\"HRA exemption\" width=\"960\" height=\"470\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/HRA-examption-.jpg 960w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/HRA-examption--300x147.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/HRA-examption--768x376.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/10\/HRA-examption--800x392.jpg 800w\" sizes=\"(max-width: 960px) 100vw, 960px\" \/><\/h2>\n<p class=\"\" data-start=\"895\" data-end=\"961\">Employees claiming HRA deductions without actually renting a property. and Fake rent receipts issued by landlords who do not declare the rental income.<\/p>\n<p><strong><span style=\"color: #000080;\">What are the key concerns related to the non-deduction of TDS on rent?\u00a0<\/span><\/strong><\/p>\n<p>If you pay rent exceeding \u20b950,000 per month, you are required to deduct 5% TDS under Section 194IB (for individuals &amp; HUFs not subject to audit). Similarly, businesses and firms must deduct 10% TDS under Section 194I if applicable.<\/p>\n<h3 class=\"\" data-start=\"389\" data-end=\"457\"><span class=\"ez-toc-section\" id=\"Other_Areas_of_Investigation_Fraudulent_Claims_Identified\"><\/span><span style=\"color: #000080;\"><strong data-start=\"393\" data-end=\"455\">Other Areas of Investigation &amp; Fraudulent Claims Identified<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li data-start=\"459\" data-end=\"508\">Fake Donations &amp; Political Contributions: False claims under Section 80G (charitable donations) and 80GGB\/80GGC (political party donations). And some taxpayers made bogus donations and received cash refunds from trusts. Form 10BE non-compliance flagged.<\/li>\n<li data-start=\"759\" data-end=\"827\">Fabricated Education Loan Interest Deductions (Section 80E): Claiming tax benefits on non-existent education loans.<\/li>\n<li data-start=\"895\" data-end=\"961\">Fake Tax-Free Investments (Section 80C &amp; 80D): Investments\u00a0in PPF, LIC, and ELSS mutual funds falsely claimed. and false health insurance premium claims under Section 80D.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Repercussions_of_Failing_to_Deduct_TDS_on_Rent\"><\/span><span style=\"color: #000080;\"><strong>Repercussions of Failing to Deduct TDS on Rent:\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"What_are_the_potential_consequences_for_taxpayers_employers\"><\/span><span style=\"color: #000080;\"><strong data-start=\"1336\" data-end=\"1379\">What are the potential consequences for taxpayers &amp; employers?\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li data-start=\"1383\" data-end=\"1414\">Tax Demand &amp; Penalty: 100% to 300% penalty under Section 270A for misreporting or underreporting income. and also face Interest under Section 234B &amp; 234C for unpaid tax dues.<\/li>\n<li>Employer Liability: Companies facilitating fraudulent claims under Section 192 (TDS on salary) will be penalized.<\/li>\n<li data-start=\"1383\" data-end=\"1414\">Disallowance of 30% of Rent as Expense (Section 40(a)(ia)): Businesses failing to deduct TDS will lose the 30% deduction on rental expenses, increasing taxable income.<\/li>\n<li data-start=\"1581\" data-end=\"1610\">Scrutiny &amp; Notices: E-verification &amp; inquiries on large donations or mismatched claims with Form 26AS, AIS, and TIS.<\/li>\n<li>Retrospective TDS Payment &amp; Interest (Section 201(1A)): 1% per month on TDS not deducted. and 1.5% per month if deducted but not deposited on time.<\/li>\n<li>Deemed Assessee-in-Default (Section 201(1)): The taxpayer becomes liable to pay the tax due.<\/li>\n<li>Penalty (Section 271C): A penalty equal to the amount of TDS not deducted may be levied.<\/li>\n<li>Prosecution Risk (Section 276B): Imprisonment of 3 months to 7 years for willful failure to deduct\/deposit TDS. Severe fraud cases may lead to prosecution under Section 276C, with imprisonment up to 7 years.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"What_next_steps_should_taxpayers_take\"><\/span><span style=\"color: #000080;\"><strong>What next steps should taxpayers take?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li data-start=\"2037\" data-end=\"2407\">Verify that all deductions &amp; exemptions claimed are backed by genuine receipts &amp; documents.<\/li>\n<li data-start=\"2037\" data-end=\"2407\">Verify whether TDS was deducted &amp; deposited correctly.<\/li>\n<li data-start=\"2037\" data-end=\"2407\">Ensure that Form 10BE is available for donation claims. and also Ensure donations under 80G are backed by valid receipts &amp; Form 10BE (for CSR donations).<\/li>\n<li data-start=\"2037\" data-end=\"2407\">File TDS returns (Form 26QC for 194IB, Form 26Q for 194I) to avoid penalties.<\/li>\n<li data-start=\"2037\" data-end=\"2407\">Reassess past ITRs &amp; rectify errors through an updated return (ITR-U) before March 31, 2025, to avoid severe penalties.<\/li>\n<li data-start=\"2037\" data-end=\"2407\">Check for compliance notices in your e-filing account.<\/li>\n<li data-start=\"2037\" data-end=\"2407\">Employers should educate employees on legitimate deductions &amp; compliance.<\/li>\n<\/ul>\n<h2 data-start=\"154\" data-end=\"223\"><span class=\"ez-toc-section\" id=\"CBDT_Launches_Nationwide_Crackdown_on_Fake_Donation_Deductions\"><\/span><span style=\"color: #000080;\"><strong data-start=\"157\" data-end=\"223\">CBDT Launches Nationwide Crackdown on Fake Donation Deductions<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p data-start=\"225\" data-end=\"469\">The Central Board of Direct Taxes has initiated a nationwide enforcement drive against intermediaries and organized syndicates involved in filing income tax returns with bogus donation deductions and fraudulent exemptions.\u00a0Using advanced data analytics and AI-based risk profiling, the tax authorities have identified over 2 lakh taxpayers who collectively claimed nearly INR 11,000 crore in deductions through fake or non-existent charitable organizations and RUPPs.\u00a0Key Findings So Far<\/p>\n<ul data-start=\"758\" data-end=\"1227\">\n<li data-start=\"758\" data-end=\"880\">\n<p data-start=\"760\" data-end=\"880\">54,000 taxpayers have already revised their returns, withdrawing ineligible claims amounting to INR 1,400 crore<\/p>\n<\/li>\n<li data-start=\"881\" data-end=\"955\">\n<p data-start=\"883\" data-end=\"955\">Detection of organised agent networks facilitating fraudulent claims<\/p>\n<\/li>\n<li data-start=\"956\" data-end=\"1023\">\n<p data-start=\"958\" data-end=\"1023\">Misuse of CSR-linked trusts and shell charitable institutions<\/p>\n<\/li>\n<li data-start=\"1024\" data-end=\"1067\">\n<p data-start=\"1026\" data-end=\"1067\">Circulation of fake donation receipts<\/p>\n<\/li>\n<li data-start=\"1068\" data-end=\"1227\">\n<p data-start=\"1070\" data-end=\"1127\">Aggressive promotion of \u201cguaranteed refunds\u201d through:<\/p>\n<ul data-start=\"1130\" data-end=\"1227\">\n<li data-start=\"1130\" data-end=\"1156\">\n<p data-start=\"1132\" data-end=\"1156\">Social media platforms<\/p>\n<\/li>\n<li data-start=\"1159\" data-end=\"1184\">\n<p data-start=\"1161\" data-end=\"1184\">Cinema advertisements<\/p>\n<\/li>\n<li data-start=\"1187\" data-end=\"1227\">\n<p data-start=\"1189\" data-end=\"1227\">Messaging apps and digital campaigns<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3 data-start=\"1229\" data-end=\"1251\"><span class=\"ez-toc-section\" id=\"CBDTs_Warning\"><\/span><span style=\"color: #000080;\"><strong data-start=\"1233\" data-end=\"1251\">CBDT\u2019s Warning<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"1252\" data-end=\"1298\">The Income Tax Department has reiterated that Claiming fake deductions is a serious offence &amp;\u00a0Taxpayers availing such schemes may face Reassessment proceedings, Penalties and interest, Prosecution in severe cases<\/p>\n<h3 data-start=\"1490\" data-end=\"1519\"><span class=\"ez-toc-section\" id=\"CBDT_Advisory_to_Taxpayers\"><\/span><span style=\"color: #000080;\"><strong data-start=\"1494\" data-end=\"1519\">CBDT Advisory to Taxpayers<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"1520\" data-end=\"1554\">Taxpayers are strongly advised to Claim deductions only for genuine donations, Verify the registration and approval status of charitable institutions, &amp; Avoid agents or schemes promising assured refunds<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Tax Dept intensified scrutiny on Section 80G donations &amp; HRA exemptions The Income Tax Department&#8217;s intensified scrutiny on Section 80G donations and HRA exemptions under Section 10(13A) highlights the need for taxpayers to be extra vigilant in ensuring compliance. False House Rent Allowance (HRA) Claims (Section 10(13A)): Employees claiming HRA deductions without actually renting a &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[150],"tags":[10300],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/29061"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=29061"}],"version-history":[{"count":3,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/29061\/revisions"}],"predecessor-version":[{"id":30696,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/29061\/revisions\/30696"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=29061"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=29061"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=29061"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}