ITR Penalty: If you have given this slip at the time of filing ITR, then you will be fined 200 percent.

Agro Haryana, New Delhi: With the deadline for filing Income Tax Return (ITR) ending on July 31, 2023, the tax department is taking steps to deal with taxpayers allegedly using fake rent receipts to evade tax. is picking up

Experts say that if mistakes are found, the department has the right to impose a penalty of up to 200 per cent of the applicable tax on the mis-reported income.

The Income Tax Act gives certain tax exemptions and deductions in respect of House Rent Allowance (HRA) and donations. To claim such exemption from HRA, taxpayers sometimes resort to fake rent receipts.

After which, due to wrong deduction of rent receipt or donation, notices can ask for valid documents, payment proof of rent or proof of donation given.

In these situations, it is considered wrong reporting of income.

Misrepresentation or concealment of facts, claim of expenditure not supported by documentary evidence, or posting of any wrong entry in the books of account amounts to misreporting of income, and hence tax payable on such underreporting A fine of an amount equal to 200 per cent of Rs.

"The income is liable to tax under section 270A," Diwakar Vijayasarathy, founder and CEO of DVS Advisors, said in a statement to sister channel CNBC TV 18.

What do experts say

Moreover, rejection of fake rent receipts can lead to re-calculation of income by the tax authority, said Yeshua Sehgal, chief of tax markets at AKM Global, a tax and consultancy firm.

Sehgal told CNBC-TV18.com, "It should be noted that there is also a provision of jail term to deal with such cases." Further, any entry in the books of account based on forged or false documents or any false piece of documentary evidence is treated as an erroneous entry.

If it is detected during the course of action, a fine of Rs 10,000 or tax evasion can be imposed under section 271AAD.

This action is taken when professionals give wrong information

Further, where any professional, i.e. accountant or merchant banker submits a report or certificate based on false information, the AO or the CIT(a) shall direct such professional to pay a sum of Rs.10,000 for each such report Could