The Income Tax Department is employing Artificial Intelligence (AI) to detect and identify suspected taxpayers. The AI will assist in catching fraudsters who have claimed deductions for house rent and housing loan interest rates.
As per some reports, most of the discrepancies in Income tax returns are found relating to home loans and house rent. Through the potential of AI, it is easy to analyze patterns and anomalies.
According to some experts, many taxpayers are living with their close relatives, and yet they claim deductions. However, in most cases, the owner of the property or rent receiver does not disclose this as rental income in returns.
Some chartered accountants also stated that because the salaried class is unable to preserve money due to rising inflation and more expenses, they are resorting to questionable tax strategies.
The Income Tax Department’s AI system is detecting bogus taxpayer returns, and the department is sending notices to suspected individuals who filed for exemptions under HRA under Section 10 (13A) and deductions for interest paid on home loans under Section 24 (b) of the I-T Act.
The last for filing an income tax return is July 31, 2023. The I-T department has urged taxpayers to file their ITRs as soon as possible to prevent last-minute rushes and fines.
If an individual fails to file the ITR income tax return by July 31, he or she may file a belated ITR, but there will be a late filing penalty.
Taxpayers who file a late ITR must pay a cost of Rs 5,000, however, the maximum penalty for those whose income does not exceed Rs 5 lakh is Rs 1,000.
