Tuesday, May 28, 2024
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CBDT Clarifies Misconceptions Regarding HRA Claims

New Delhi, EW Correspondent: The Central Board of Direct Taxes (CBDT) has issued a clarification amidst media reports suggesting a special drive to reopen cases related to House Rent Allowance (HRA) claims. The CBDT has addressed certain instances of mismatched information between taxpayer filings and data available with the Income Tax Department, which were flagged during routine verification exercises. However, concerns have been raised through social media posts and media articles regarding CBDT’s inquiries into cases where employees have allegedly made incorrect claims regarding HRA and rent paid.

It is essential to note that any apprehensions regarding retrospective taxation or the reopening of cases concerning HRA claims are unfounded. The CBDT has emphasized that the recent data analysis focused on specific high-value cases of mismatched rental information for the Financial Year (FY) 2020-21. This verification process was conducted in a limited number of cases without the widespread reopening of cases, especially considering that taxpayers had the opportunity to file Updated Returns for FY 2020-21 (Assessment Year 2021-22) until March 31, 2024.

The CBDT has clarified that the objective of the e-verification was solely to identify cases of information discrepancies for FY 2020-21, without impacting other tax assessments. There is no ongoing special drive to reopen such cases, and reports suggesting otherwise are deemed inaccurate by the CBDT.

In essence, the CBDT’s clarification aims to allay concerns and misconceptions regarding HRA claims and the purported large-scale reopening of cases by the Income Tax Department. It underscores the importance of accurate reporting and compliance while assuring taxpayers that the department’s actions are focused on ensuring fair and transparent tax administration.

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