It said many taxpayers had claimed deductions for donations to Registered Unrecognised Political Parties (RUPPs) that were later found to be non-operational, non-filers or not engaged in any political activity.
In its investigation, the Income Tax Department found many intermediaries involved in filing returns with false claims of deductions and exemptions under the Income Tax Act, often on a commission basis.
These entities were allegedly used to issue bogus donation receipts, enabling taxpayers to reduce their tax liabilities and claim fraudulent refunds and the department has already initiated action against them, CBDT said in a statement issued Saturday. Follow up searches also uncovered evidence of fictitious donations and bogus corporate social responsibility (CSR) claims by companies, the CBDT statement said.
Suspected Hawala Transactions
Authorities also found indications that some entities were being used as conduits for routing funds, including suspected hawala transactions and cross-border remittances. The department has already initiated action against such intermediaries.
Data analytics help CBDT identify taxpayers availing such bogus transactions and donations and when the department reached out to such taxpayers, they failed to provide sufficient information to establish genuineness of donations. Many taxpayers have already revised their returns for the current assessment year 2025–26 and filed updated returns for previous years, it said.The board has launched a “nudge” campaign, giving taxpayers an opportunity to voluntarily update their returns and withdraw incorrect claims. SMS and email advisories are being sent to identified taxpayers from December 12, to their registered contact details. The CBDT has asked taxpayers to ensure that their mobile numbers and email addresses are correctly updated to avoid missing official communications.