New Delhi: The Central Board of Direct Taxes (CBDT) has intensified its crackdown on bogus deductions and exemptions claimed in income tax returns through a strengthened data-driven approach, with a special focus on fake donation claims to political parties and charitable trusts.
According to the CBDT, investigations revealed that several intermediaries were involved in filing income tax returns with incorrect claims under the Income Tax Act on a commission basis. These intermediaries had allegedly set up networks of agents across the country to facilitate bogus deductions and refunds for taxpayers.
The tax authority found that a large number of false claims were made under donations to Registered Unrecognised Political Parties (RUPPs) and certain charitable institutions. Evidence gathered during enforcement actions indicated that many RUPPs were non-filers, non-operational at their registered addresses and not engaged in any political activity. These entities were allegedly being used as conduits for routing funds, hawala transactions, cross-border remittances and issuing fake donation receipts. Follow-up searches conducted by the CBDT on some RUPPs and trusts also unearthed incriminating evidence related to bogus donations by individuals and fraudulent Corporate Social Responsibility (CSR) claims by companies.
Officials said the CBDT has enhanced its analytics-based risk assessment to enable early detection of suspicious claims and identification of high-risk behaviour patterns. One such pattern has been identified among taxpayers claiming deductions under Sections 80GGC and 80G of the Income Tax Act, 1961, particularly where donations were made to suspicious entities or where sufficient information was not provided to establish the genuineness of the recipients.
As part of this effort, a targeted and taxpayer-friendly ‘NUDGE’ campaign has been launched to encourage voluntary compliance. The campaign provides taxpayers an opportunity to revise or update their income tax returns and withdraw incorrect claims, if any. SMS and email advisories have been sent to identified taxpayers on their registered mobile numbers and email IDs starting from December 12, 2025.
The CBDT noted that a large number of taxpayers have already revised their returns for the current assessment year 2025–26 and have also filed updated returns for previous years following the detection drive.
Taxpayers have been advised to ensure that their correct mobile numbers and email addresses are updated with the Income Tax Department to avoid missing official communications. Additional information on deduction provisions and filing of updated returns is available on the Income Tax Department’s official portal.
