Over 2 lakh taxpayers are under the Income Tax radar, and suspicious deductions could lead to major action
The Income Tax Department has informed that 54,000 taxpayers have already rectified their filings and withdrawn ineligible claims worth around ₹1,400 crore and updated their returns.
Income Tax Department: The Income Tax Department is investigating more than 1.4 lakh taxpayers with suspicious claims totaling ₹4,100 crore.
The department is now asking them to correct their income tax returns (ITRs), official sources in the tax department said on Saturday.
The department has over 2 lakh taxpayers under its scanner.
A source said, "Data analytics has flagged over 2 lakh taxpayers who claimed suspicious deductions under Section 80GGC. These amounted to approximately Rs 5,500 crore and were routed through dubious or non-existent RUPPs (Registered Unrecognised Political Parties) and similar fraudulent donations to non-genuine charitable organisations."
The Income Tax Department has reported that 54,000 taxpayers have already corrected their filings, withdrawing ineligible claims worth approximately ₹1,400 crore, and updated their returns.
The source said, "Most of these taxpayers claimed deductions of less than ₹5 lakh. Some companies also claimed much higher deductions."
Another source stated that on July 14, 2025, nationwide verification and enforcement actions were conducted, covering 150 locations. During this period, more than 102 RUPPs were found to be suspicious for their role in facilitating deductions related to fraudulent donations.
It was also found that an intermediary was advertising guaranteed refunds in cinema halls and on social media and luring taxpayers into making fraudulent refund claims in exchange for commission payments.
CSR-related trusts were used
According to sources, one operation found a syndicate of professionals using WhatsApp/Telegram channels to solicit taxpayers seeking to reduce their tax liability by making false donations to RUPPs or charitable organizations.
Sources said the investigation also revealed misuse of CSR-related trusts, which provided fake donation receipts in exchange for cashbacks, thereby undermining both corporate governance rules and political funding regulations.