{"id":1555,"date":"2026-07-26T20:20:55","date_gmt":"2026-07-26T15:50:55","guid":{"rendered":"https:\/\/caalokkumar.com\/my-writing\/?p=1555"},"modified":"2026-07-26T20:20:57","modified_gmt":"2026-07-26T15:50:57","slug":"salary-itr-mismatches-form-24q-scrutiny","status":"publish","type":"post","link":"https:\/\/caalokkumar.com\/my-writing\/salary-itr-mismatches-form-24q-scrutiny\/","title":{"rendered":"Salary ITR Mismatches Under Scrutiny: Employers Asked to Verify Form 24Q and Bogus Tax Claims"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Updated: 26 July 2026<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Salary ITR Mismatches Under Scrutiny : &#8211; The Income Tax Department has reportedly intensified its action against incorrect salary-related tax claims by asking employers to analyse mismatches in salary filings and Form 24Q.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The exercise is aimed at detecting cases involving inflated House Rent Allowance exemptions, ineligible deductions, false allowance claims and the practice of replacing one disallowed tax benefit with another\u2014described as \u201cdeduction swapping\u201d or \u201cconcession swapping\u201d.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">According to a report published by <em>The Times of India<\/em>, around <strong>15,000 to 20,000 cases<\/strong> involving suspicious claims may be considered for scrutiny. The reported threshold for identifying suspected claims was approximately <strong>\u20b950,000 to \u20b91 lakh<\/strong>. Employers, including companies and government departments, have reportedly been asked to examine Form 24Q mismatches and sensitise employees against agents who promise inflated refunds through false claims. (<a href=\"https:\/\/timesofindia.indiatimes.com\/business\/india-business\/employers-told-to-analyse-mismatches-in-salary-filings\/amp_articleshow\/131923124.cms\" target=\"_blank\" rel=\"noopener\">The Times of India<\/a>)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The employer-specific development is presently based on media reporting. However, the broader use of data analytics and taxpayer communications under the Income Tax Department\u2019s NUDGE campaign is officially confirmed by the Central Board of Direct Taxes.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>CBDT\u2019s NUDGE Campaign Against Bogus Deductions<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The Central Board of Direct Taxes has been using its <strong>NUDGE\u2014Non-Intrusive Usage of Data to Guide and Enable\u2014campaign<\/strong> to identify suspicious deductions and give taxpayers an opportunity to correct their returns voluntarily.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In its official release dated 13 December 2025, the CBDT stated that enforcement action had revealed networks of intermediaries filing returns with incorrect deductions and exemptions in exchange for commission. The Department also confirmed that data analytics were being used to identify high-risk patterns and that SMS and email advisories were being issued to selected taxpayers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The official campaign initially focused on suspicious donation claims under Sections 80G and 80GGC, but the present development indicates that salary exemptions and employer-reported information are also receiving closer attention. (<a href=\"https:\/\/www.pib.gov.in\/PressReleasePage.aspx?PRID=2203457&amp;lang=1&amp;reg=3\" target=\"_blank\" rel=\"noopener\">Press Information Bureau<\/a>)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Taxpayers should therefore treat any email, SMS or e-campaign communication seriously and verify their return rather than ignoring the mismatch.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What Is Deduction or Concession Swapping?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Deduction swapping occurs when a taxpayer withdraws one unsupported claim after it is questioned but replaces it with another claim producing a similar tax benefit.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Reported example: HRA replaced with Section 10(14) allowance<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A taxpayer may initially claim an excessive HRA exemption. After the claim is flagged, the taxpayer withdraws the HRA amount but claims a similar exemption under Section 10(14) for:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>conveyance allowance;<\/li>\n\n\n\n<li>children\u2019s education allowance;<\/li>\n\n\n\n<li>hill-area allowance;<\/li>\n\n\n\n<li>uniform allowance; or<\/li>\n\n\n\n<li>another prescribed special allowance.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Changing the section number does not make the claim valid. Every exemption must independently satisfy the conditions of the Act and Rules.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Reported example: Donation category changed<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Another reported pattern involves changing a donation claim from a political party to a research institution or another eligible entity while paying only a nominal amount of additional tax.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Such conduct may be viewed differently from a genuine correction because it suggests an attempt to preserve an unsupported tax benefit instead of correcting the return honestly. (<a href=\"https:\/\/timesofindia.indiatimes.com\/business\/india-business\/employers-told-to-analyse-mismatches-in-salary-filings\/amp_articleshow\/131923124.cms\" target=\"_blank\" rel=\"noopener\">The Times of India<\/a>)<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Why Form 24Q Has Become Important<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Form 24Q is the quarterly TDS statement filed by an employer for tax deducted from salary. Under the Income-tax Act, 1961, it is filed under <strong>Section 200(3), read with Rule 31A of the Income-tax Rules, 1962<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The final-quarter statement contains detailed employee-wise information, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>gross salary;<\/li>\n\n\n\n<li>exempt allowances;<\/li>\n\n\n\n<li>deductions considered by the employer;<\/li>\n\n\n\n<li>taxable salary;<\/li>\n\n\n\n<li>employee PAN;<\/li>\n\n\n\n<li>tax deducted; and<\/li>\n\n\n\n<li>tax deposited.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The employer also issues Form 16 containing salary and TDS information. The Income Tax Department can compare this information with:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>the employee\u2019s Income Tax Return;<\/li>\n\n\n\n<li>Form 16;<\/li>\n\n\n\n<li>Form 26AS;<\/li>\n\n\n\n<li>Annual Information Statement;<\/li>\n\n\n\n<li>Taxpayer Information Summary;<\/li>\n\n\n\n<li>declarations submitted to the employer; and<\/li>\n\n\n\n<li>information received from banks and other reporting entities.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The official Income Tax Department guidance confirms that employers deduct salary TDS under Section 192, issue Form 16 and file quarterly salary TDS statements in Form 24Q. (<a href=\"https:\/\/www.incometaxindia.gov.in\/w\/salary?utm_source=chatgpt.com\" target=\"_blank\" rel=\"noopener\">Etds<\/a>)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Employers requiring assistance with reconciliation, correction statements or other salary-TDS compliances may review professional <a href=\"https:\/\/caalokkumar.com\/tds-services.html\">TDS compliance services<\/a>.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><a href=\"https:\/\/caalokkumar.com\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"830\" src=\"https:\/\/caalokkumar.com\/my-writing\/wp-content\/uploads\/2026\/07\/TOI-1024x830.jpeg\" alt=\"\" class=\"wp-image-1556\" srcset=\"https:\/\/caalokkumar.com\/my-writing\/wp-content\/uploads\/2026\/07\/TOI-1024x830.jpeg 1024w, https:\/\/caalokkumar.com\/my-writing\/wp-content\/uploads\/2026\/07\/TOI-300x243.jpeg 300w, https:\/\/caalokkumar.com\/my-writing\/wp-content\/uploads\/2026\/07\/TOI-768x623.jpeg 768w, https:\/\/caalokkumar.com\/my-writing\/wp-content\/uploads\/2026\/07\/TOI.jpeg 1317w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><figcaption class=\"wp-element-caption\">Salary ITR Mismatches &#8211; Under Scrutiny<\/figcaption><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\"><strong>Salary Claims Likely to Face Closer Verification<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>1. House Rent Allowance exemption<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">HRA exemption is governed by <strong>Section 10(13A), read with Rule 2A<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The exemption is restricted to the least of:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>actual HRA received;<\/li>\n\n\n\n<li>rent paid minus 10% of salary; or<\/li>\n\n\n\n<li>50% of salary for Delhi, Mumbai, Kolkata or Chennai, and 40% for other locations.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">A person living in a self-owned property or not actually paying rent cannot claim HRA exemption merely because HRA appears in the salary structure.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The revised ITR schedule also requires specific information regarding the place of work, actual HRA received, rent paid, basic salary and dearness allowance. (<a href=\"https:\/\/wmstatic-prd.incometaxindia.gov.in\/web\/guest\/w\/schedule_10_13a?utm_source=chatgpt.com\" target=\"_blank\" rel=\"noopener\">Income Tax India<\/a>)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Taxpayers can make an initial eligibility calculation through the <a href=\"https:\/\/caalokkumar.com\/hra-calculator.html\">HRA exemption calculator<\/a>, but the final claim must be supported by rent receipts, the rental arrangement, payment evidence and other relevant documents.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. Allowances under Section 10(14)<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Section 10(14), read with Rule 2BB, does not provide a blanket exemption for every amount described as an allowance.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Certain allowances are exempt only:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>when granted for a prescribed purpose;<\/li>\n\n\n\n<li>to the extent expenditure is actually incurred;<\/li>\n\n\n\n<li>when connected with the performance of employment duties; or<\/li>\n\n\n\n<li>subject to the prescribed monetary and geographical limits.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Rule 2BB specifically covers allowances relating to official travel, transfer, conveyance during the performance of duties, helpers, academic or research pursuits and uniforms. It also prescribes separate limits for specified hill, border, tribal, high-altitude and field-area allowances. (<a href=\"https:\/\/wmstatic-prd.incometaxindia.gov.in\/web\/guest\/w\/rule-2bb?utm_source=chatgpt.com\" target=\"_blank\" rel=\"noopener\">Income Tax India<\/a>)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">An ordinary employee cannot claim hill-area allowance merely by selecting the relevant exemption code in the ITR.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>3. Claims inconsistent with the selected tax regime<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">For Assessment Year 2026-27, the new tax regime under Section 115BAC is the default regime.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Under the new regime, HRA exemption under Section 10(13A) and most exemptions under Section 10(14) are not available. Most Chapter VI-A deductions are also unavailable, except specified deductions such as employer contribution under Section 80CCD(2).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Income Tax Department expressly confirms that HRA exemption is not available under the new tax regime. (<a href=\"https:\/\/www.incometaxindia.gov.in\/w\/computation-of-tax-for-individual-1?utm_source=chatgpt.com\" target=\"_blank\" rel=\"noopener\">Etds<\/a>)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Therefore, a taxpayer who files under the new regime but simultaneously claims HRA, Section 80C, Section 80D or another unavailable deduction may create an immediate risk indicator.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A detailed discussion of lawful salary deductions is available in the article on <a href=\"https:\/\/caalokkumar.com\/my-writing\/salary-tax-planning-a2026-27\/\">salary tax planning for AY 2026-27<\/a>.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>4. Donations under Sections 80G and 80GGC<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Donation deductions may be examined where:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>the recipient is not eligible;<\/li>\n\n\n\n<li>payment conditions are not satisfied;<\/li>\n\n\n\n<li>the amount claimed exceeds the actual donation;<\/li>\n\n\n\n<li>the donation is returned in cash;<\/li>\n\n\n\n<li>the receipt is fabricated; or<\/li>\n\n\n\n<li>the entity is non-operational or suspicious.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The CBDT has officially confirmed the use of data analytics to identify high-risk donation claims and intermediaries filing false returns on commission. (<a href=\"https:\/\/www.pib.gov.in\/PressReleasePage.aspx?PRID=2203457&amp;lang=1&amp;reg=3\" target=\"_blank\" rel=\"noopener\">Press Information Bureau<\/a>)<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>5. Chapter VI-A deductions<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Other claims that may be matched with third-party information include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Section 80C investments;<\/li>\n\n\n\n<li>Section 80D health insurance premium;<\/li>\n\n\n\n<li>Section 80E education-loan interest;<\/li>\n\n\n\n<li>National Pension System contributions;<\/li>\n\n\n\n<li>housing-loan deductions; and<\/li>\n\n\n\n<li>deductions available only under the old tax regime.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The amount appearing in Form 16 is not always the maximum amount that can legally be claimed in the ITR. An employee may claim an otherwise eligible deduction directly in the return even if it was not submitted to the employer. However, the taxpayer must possess genuine evidence and must have selected a tax regime under which the deduction is permissible.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Does Every Form 24Q Mismatch Mean a Bogus Claim?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">No.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A mismatch does not automatically establish tax evasion. Genuine differences can arise because of:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>employment with more than one employer;<\/li>\n\n\n\n<li>salary arrears or advance salary;<\/li>\n\n\n\n<li>delayed Form 24Q correction;<\/li>\n\n\n\n<li>deductions not reported to the employer but claimed in the return;<\/li>\n\n\n\n<li>an incorrect Form 16 later corrected by the employer;<\/li>\n\n\n\n<li>relief under Section 89;<\/li>\n\n\n\n<li>previous-employer salary not considered by the current employer; or<\/li>\n\n\n\n<li>a bona fide data-entry error.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The decisive issue is whether the claim is legally admissible and supported by reliable evidence.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Employers should not mechanically treat every mismatch as misconduct. They should reconcile payroll records, employee declarations, Form 24Q and correction statements before drawing conclusions.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Income-tax Act, 1961 or Income-tax Act, 2025\u2014Which Law Applies?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The Income-tax Act, 2025 came into force on 1 April 2026. However, returns for <strong>AY 2026-27<\/strong>, relating to income earned up to 31 March 2026, continue to be filed and processed under the Income-tax Act, 1961.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Income Tax Department has expressly clarified that taxpayers filing AY 2026-27 returns in July 2026 will use forms prescribed under the old Act, while tax compliance for the tax year beginning 1 April 2026 will follow the new Act. (<a href=\"https:\/\/www.incometax.gov.in\/iec\/foportal\/help\/all-topics\/e-filing-services\/objective-and-scope-new-act?mobile-app=1&amp;utm_source=chatgpt.com\" target=\"_blank\" rel=\"noopener\">Income Tax India<\/a>)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Readers may use the <a href=\"https:\/\/caalokkumar.com\/income-tax-act-2025-section-finder\/\">Income-tax Act, 2025 Section Finder<\/a> and <a href=\"https:\/\/caalokkumar.com\/income-tax-form-finder.html\">Income Tax Form Finder<\/a> to understand the relevant provisions and forms.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Possible Consequences of Unsupported Salary Claims<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Adjustment while processing the return<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">An incorrect claim apparent from the information in the return may be adjusted while processing the return under Section 143(1), after following the prescribed procedure. (<a href=\"https:\/\/www.incometaxindia.gov.in\/w\/section-143-54?utm_source=chatgpt.com\" target=\"_blank\" rel=\"noopener\">Etds<\/a>)<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Scrutiny assessment<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The case may be selected for scrutiny where the Department considers verification necessary to determine whether:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>income has been understated;<\/li>\n\n\n\n<li>excessive exemption or deduction has been claimed;<\/li>\n\n\n\n<li>tax has been underpaid; or<\/li>\n\n\n\n<li>the refund claimed is incorrect.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Taxpayers receiving a notice should prepare a complete reconciliation and documentary response. Professional assistance may be obtained for <a href=\"https:\/\/caalokkumar.com\/faceless-assessment.html\">faceless assessment representation<\/a> and by referring to the <a href=\"https:\/\/caalokkumar.com\/income-tax-scrutiny-guidelines-fy-2026-27.html\">Income Tax scrutiny guidelines for FY 2026-27<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Interest and additional tax<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Withdrawal of an incorrect claim may create additional tax and interest liability. An updated return can also involve additional income tax depending on the delay involved.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Penalty under Section 270A<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Under Section 270A:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>under-reporting of income can attract a penalty equal to <strong>50% of the tax payable on under-reported income<\/strong>; and<\/li>\n\n\n\n<li>misreporting can attract a penalty equal to <strong>200% of the tax payable on misreported income<\/strong>.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Misreporting includes misrepresentation or suppression of facts and claiming expenditure without supporting evidence. Whether a particular false exemption or deduction constitutes misreporting will depend on the facts and the nature of the claim. (<a href=\"https:\/\/www.incometaxindia.gov.in\/w\/section-270a-12?utm_source=chatgpt.com\" target=\"_blank\" rel=\"noopener\">Etds<\/a>)<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Prosecution in serious cases<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">In deliberate cases, provisions relating to wilful tax evasion and false statements may also be examined. Section 276C deals with wilful attempts to evade tax, while Section 277 covers statements in verification that a person knows or believes to be false. Prosecution is generally relevant to intentional and serious defaults\u2014not ordinary bona fide mistakes. (<a href=\"https:\/\/www.incometaxindia.gov.in\/w\/section-276c-24?utm_source=chatgpt.com\" target=\"_blank\" rel=\"noopener\">Etds<\/a>)<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What Should Salaried Taxpayers Do Now?<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>1. Reconcile the available records<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Compare:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Form 16;<\/li>\n\n\n\n<li>Form 26AS;<\/li>\n\n\n\n<li>AIS and TIS;<\/li>\n\n\n\n<li>salary slips;<\/li>\n\n\n\n<li>employer Form 24Q information;<\/li>\n\n\n\n<li>the filed ITR; and<\/li>\n\n\n\n<li>the tax regime selected.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. Verify every exemption and deduction<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Ensure that each claim is supported by:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>payment evidence;<\/li>\n\n\n\n<li>receipts;<\/li>\n\n\n\n<li>agreements;<\/li>\n\n\n\n<li>bank entries;<\/li>\n\n\n\n<li>certificates;<\/li>\n\n\n\n<li>eligible investment records; and<\/li>\n\n\n\n<li>satisfaction of the applicable legal conditions.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>3. Do not replace one wrong claim with another<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Correction means removing the ineligible claim and paying the correct tax. Merely changing the section or description while retaining substantially the same tax benefit may increase scrutiny risk.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>4. Correct the return through the appropriate route<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Where the revised-return period is open, the taxpayer may file a revised return.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Where permissible, an <a href=\"https:\/\/caalokkumar.com\/itr-u-updated-return-filing.html\">updated return or ITR-U<\/a> may be considered. The time limit for an updated return has been extended to 48 months, subject to statutory conditions. However, an updated return cannot be used to reduce tax liability, increase a refund or report an enhanced loss. (<a href=\"https:\/\/www.incometaxindia.gov.in\/w\/periods-of-limitation-under-the-income-tax-law?utm_source=chatgpt.com\" target=\"_blank\" rel=\"noopener\">Etds<\/a>)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The applicable additional tax, interest and restrictions should be calculated before filing.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>5. Respond carefully to departmental communication<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Do not ignore an e-campaign message, notice or proposed adjustment. First verify whether the communication is genuine by logging into the official income-tax portal.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Where a demand has already arisen, review the records before submitting an online <a href=\"https:\/\/caalokkumar.com\/income-tax-demand-notice-response.html\">response to an Income Tax demand notice<\/a>.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What Should Employers Do?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Employers should consider the following measures:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Reconcile payroll records with quarterly and annual Form 24Q statements.<\/li>\n\n\n\n<li>Review unusual exemption or deduction patterns.<\/li>\n\n\n\n<li>Verify whether salary components are correctly classified.<\/li>\n\n\n\n<li>File correction statements wherever Form 24Q contains an error.<\/li>\n\n\n\n<li>Maintain employee declarations and supporting documents.<\/li>\n\n\n\n<li>Educate employees about the risks of refund agents and false claims.<\/li>\n\n\n\n<li>Establish a documented process for responding to departmental mismatch communications.<\/li>\n\n\n\n<li>Avoid certifying exemptions that are unsupported or inconsistent with payroll records.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">Employers should also distinguish between an incorrect employee ITR claim and an error in the employer\u2019s own payroll or TDS reporting.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Practical Illustration<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Suppose an employee receives HRA of \u20b94,80,000 and claims the entire amount as exempt without verifying the Rule 2A calculation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">After receiving a communication, the employee withdraws \u20b93,00,000 of the HRA claim but claims the same amount as conveyance and hill-area allowances, even though:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>the employee did not receive those allowances from the employer;<\/li>\n\n\n\n<li>the allowances do not appear in the salary structure;<\/li>\n\n\n\n<li>no official-duty expenditure was incurred; and<\/li>\n\n\n\n<li>the employee was not posted in an eligible area.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The revised claim would not become valid merely because different exemption codes were selected. It may instead indicate deliberate concession swapping and increase the possibility of scrutiny and penalty.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Frequently Asked Questions<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Can an employee claim a deduction not shown in Form 16?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Yes, provided the deduction is legally available under the tax regime selected and the employee possesses valid supporting evidence. Absence from Form 16 does not by itself disqualify a genuine claim.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Can HRA be claimed under the new tax regime?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">No. HRA exemption under Section 10(13A) is not available to a taxpayer opting for the new tax regime under Section 115BAC. (<a href=\"https:\/\/www.incometax.gov.in\/iec\/foportal\/help\/new-tax-vs-old-tax-regime-faqs?mobile-app=1&amp;utm_source=chatgpt.com\" target=\"_blank\" rel=\"noopener\">Income Tax India<\/a>)<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Can an updated return be filed after receiving a NUDGE message?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">It may be filed if the taxpayer is eligible and the statutory restrictions are satisfied. ITR-U cannot be used to reduce tax or increase a refund.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Is a Form 24Q mismatch sufficient for imposing a penalty?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Not by itself. The Department must examine the facts, legal eligibility and evidence. A genuine reporting difference or bona fide error should be distinguished from deliberate misrepresentation.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Conclusion<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The Income Tax Department\u2019s expanding data-analytics framework has substantially reduced the scope for unsupported salary exemptions and deductions to remain undetected.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The reported employer-level verification of Form 24Q mismatches shows that the Department is no longer examining the employee\u2019s return in isolation. Payroll records, Form 16, AIS, TIS, deduction information and the selected tax regime can all be electronically compared.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The message for taxpayers is straightforward: <strong>claim only what the law permits, preserve the supporting evidence and correct genuine errors promptly.<\/strong> Replacing one questionable deduction with another is not tax planning; it may become evidence of misreporting.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Employers and taxpayers requiring assistance with salary reconciliation, return correction, scrutiny proceedings or notices may <a href=\"https:\/\/caalokkumar.com\/schedule-appointment.html\">schedule a professional consultation<\/a>.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><\/h2>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><strong>Disclaimer<\/strong>&#8211; <em>This article is intended for general information and professional awareness. Tax treatment depends on the applicable assessment year, tax regime and individual facts. Readers should obtain professional advice before revising or updating an Income Tax Return.<\/em><\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Income Tax Department is reportedly asking employers to analyse Form 24Q and salary filing mismatches. Salaried taxpayers making unsupported HRA, allowance or deduction claims may face data-driven scrutiny.<\/p>\n","protected":false},"author":1,"featured_media":1557,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[285],"tags":[1414,856,657,265,1418,1412,1416,1417,1415,1413],"class_list":["post-1555","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-itr-filing","tag-form-24q","tag-hra-exemption","tag-income-tax","tag-itr-filing","tag-nudge-campaign","tag-salary-income","tag-section-270a","tag-tax-scrutiny","tag-tds-mismatch","tag-updated-return"],"_links":{"self":[{"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/posts\/1555","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/comments?post=1555"}],"version-history":[{"count":1,"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/posts\/1555\/revisions"}],"predecessor-version":[{"id":1558,"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/posts\/1555\/revisions\/1558"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/media\/1557"}],"wp:attachment":[{"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/media?parent=1555"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/categories?post=1555"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/tags?post=1555"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}