Filed Wrong ITR or Claimed Fake Deductions? Last Chance to Correct via ITR-U Before Penalty

The Income Tax Department has issued a strict final warning to taxpayers who filed incorrect income tax returns (ITRs), claimed fake deductions, or hid income over the past 4 years. These individuals have been urged to fix their mistakes voluntarily using the ITR-U (Updated Return) form. If they fail to do so, they could face heavy penalties and even legal action.

Thousands Already Came Clean

The government had sent out multiple reminders through SMS, emails, and awareness campaigns over the past year. As a result, over 40,000 people came forward and corrected their ITRs in the last 4 months. These taxpayers withdrew fake deduction claims worth over ₹1,045 crore.

However, as per news reports, officials believe many others may still be involved, often under the influence of agents, chartered accountants (CAs), or consultants promising inflated refunds through fake claims.

Government Cracks Down on ITR Fraud

In a major move, the Income Tax Department recently raided around 150 locations, including tax filing centres run by CAs and consultants. During these raids, officials found fake donation receipts, fraudulent bills, forged TDS certificates, and cloned PAN cards, all part of a widespread tax evasion racket.

Read More: ITR Filing Schedule for FY 2024–25: Key Deadlines to Know.

What is ITR-U, and Who Should File It?

ITR-U (Updated Return) is a special form introduced to let taxpayers correct past ITR mistakes voluntarily. Here's what you should know:

• Eligibility: If you didn't file an ITR or filed one with incorrect income, fake deductions, or false claims, you're eligible.
• Correction Window: You can correct errors for up to 4 years from the end of the relevant assessment year.
  • Example: For FY 2020–21 (AY 2021–22), the deadline is March 31, 2026.

Penalties Based on Delay

Note: You won’t get any refunds via ITR-U. It’s purely for error correction.

No FIR or Legal Action If You Act Now

According to the CBDT, if you file the ITR-U before the tax department catches your mistake, you may avoid penalties or prosecution. But if the department detects the fraud first, you could face:

• Heavy fines
• Legal prosecution
• FIRs and court proceedings

Don’t Fall for Refund Scams

Taxpayers are also warned not to fall for fraudulent schemes run by unauthorised agents or intermediaries offering large refunds through fake deductions like those under Sections 80GGC, 80D, 80E, or 80U.

Conclusion

If you’ve filed a wrong ITR or claimed false deductions, now is your last chance to fix it using the ITR-U form. The Income Tax Department is actively investigating and has already acted against many evaders. Avoid penalties and legal troubles by correcting your filings today, before the authorities come knocking.

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