HRA claims and rent paid mismatch cases: Amid media reports suggesting that large-scale re-opening of cases related to mismatch in HRA claims is being undertaken, the tax department has come out with a clarification.
Terming the media reports “completely misplaced”, the Central Board of Direct Taxes (CBDT) has said that there is no special drive to re-open cases of mismatch in House Rent Allowance (HRA) claims and actual rent paid.
There were some media reports suggesting that the tax department has started scrutinizing the cases pertaining to incorrect HRA claims by taxpayers.
“Certain instances of mismatch of information as filed by the taxpayer and as available with the Income Tax Department have come to the notice of the department as part of its routine exercise of verification of data,” the CBDT said in a statement on April 8.
Also Read: Need urgent cash? Use Aadhaar ATM service to withdraw money from the comfort of your home
In such cases, the tax department said, the taxpayers have been alerted to enable them to take corrective action. “However, some posts on social media, as well as articles in the media, have highlighted enquiries initiated by the Central Board of Direct Taxes (CBDT) in cases where employees have made incorrect claims of HRA and rent paid.”
Any apprehensions about retrospective taxation on these matters and re-opening of cases on issues pertaining to HRA claims is completely baseless, the tax department clarified.
Data analysis was carried out in some high-value cases of mismatch between the rent paid by the employee and receipt of rent by the recipient for the FY 2020-21.
It further said that the verification was done in a small number of cases without re-opening bulk of cases, “especially since Updated Return for FY 2020-21 (AY 2021-22) could have been filed by the taxpayers concerned only till 31.03.2024”.
The objective of the e-verification was to alert cases of mismatches of information for FY 2020-21 only without affecting the others, it said.