Recently, there have been reports in media claiming that the Income Tax Department is re-opening old cases pertaining to mismatch in HRA claims by ITR filers. However, the Ministry of Finance has clarified that such reports are “completely baseless”.
In an official statement dated 8th April 2024, the Ministry noted that “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.”
However, it stressed that any apprehensions on reopening of cases related to House Rent Allowance (HRA) claims are completely baseless.
“At the outset, it is stated that any apprehensions about retrospective taxation on these matters and re-opening of cases on issues pertaining to HRA claims is completely baseless,” the Ministry said.
Also Read: House Rent Allowance calculation with examples for salaried, self-employed for AY 2024-25
Notice to taxpayers for HRA claim mismatch
However, the ministry said that the Income Tax department has noticed instances of mismatch of information filed by taxpayers. The department has also alerted such taxpayers to take corrective action.
“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. In such cases, the Department has alerted the taxpayers to enable them to take corrective action,” the Ministry said.
The income tax department carried out data analysis of some “high-value” cases of mismatch between the rent paid by the employee and receipt of rent by the recipient for FY 2020-21. The department further verified a small number of cases without re-opening bulk of cases.
“This 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 ministry said.
However, the ministry further said that the objective of the e-verification was to alert cases of mismatches of information for FY 2020-21 only without affecting the others.
“It is reiterated that there is no special drive to re-open such cases, and media reports alleging that large-scale re-opening is being undertaken by the Department are completely misplaced,” the statement added.
Want to learn the art and science of managing your money? The 1% Club can help. Details here
