By adhering to income tax laws, any taxpayer can attempt to reduce their tax liability. Both the old and the new methods offer a variety of ways to reduce taxes. But today, people who use incorrect strategies to reduce their taxes are facing consequences. For instance, some people fabricate receipts to file tax returns. They believe they can deceive the IT department. However, the Income Tax Department has excellent methods to identify these fraudulent schemes in this AI era. The deadline for filing income tax reports is July 31, 2024, therefore it’s critical to understand how the Income Tax Department detects fraudulent rent transactions.
These days,
the Income Tax Department uses synthetic data to identify fraudulent rent revenues. intelligence (AI). It does this by combining Form-16, AIS Form, and Form-26AS. Rent-related HRA is exempt from taxes, but you must present the appropriate rent receipt to qualify for this benefit. Artificial intelligence (AI) is currently being used by the Income Tax Department to determine if presenting fictitious receipts will result in tax savings.
It is first required that
your employer pays you HRA before you can deduct HRA. If the annual rent payment exceeds ₹1 lakh, the landlord’s PAN number must also be provided. The transactions about the landlord’s PAN that are documented in the AIS form are then compared by the Income Tax Department with the HRA that you have declared. Should a disparity be discovered between the sum stated and the transactions documented, the department has the authority to send you a notice. It is not required to reveal the landlord’s PAN if you pay less than Rs 1 lakh in rent annually. The Income Tax Department typically doesn’t look at HRA claims up to Rs 1 lakh in certain situations.
A lot of people use dishonest techniques to exploit HRA.
This is so that you are exempt from paying tax on the amount that you display as rent. Because of their greed, some people produce fictitious receipts in the hopes of avoiding detection. However, the Income Tax Department’s AI algorithms are now quite good at identifying these frauds, and the department notifies the victims in these situations.
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