Date: February 05, 2025

Hyderabad IT Professionals in Rs 110-Crore I-T Scam

Hyderabad IT Professionals in Rs 110-Crore I-T Scam Over Fake Political Donations

The Income Tax (I-T) department has uncovered a Rs 110-crore scam involving Hyderabad-based IT professionals from 36 companies. These professionals allegedly exploited Section 80GGC of the Income Tax Act, which allows tax deductions on donations to political parties, to fraudulently claim refunds.

Fake Political Donations for Tax Refunds

The scam came to light when the I-T officials noticed a sudden surge in donations from IT employees to Registered Unrecognized Political Parties (RUPPs). While these professionals appeared as top donors, investigations revealed that their contributions were purely for financial gain rather than political support.

The fraudulent scheme worked as follows:

Tech professionals filed false tax returns, claiming large political donations to avail tax deductions.
Political parties accepted the money via bank transfers or cheques but later returned it in cash, after deducting a commission.
Many IT employees used a common email address while filing tax returns, raising suspicion.

One shocking case involved an IT employee earning Rs 46 lakh per year, who falsely claimed to have donated Rs 45 lakh to a political party.

Political Parties Under Scrutiny

The RUPPs involved in the scam were linked to Gujarat, Telangana, and other states. Many of these parties had never:

🚫 Contested elections
🚫 Submitted financial reports to the Election Commission of India (ECI)

Hyderabad IT Professionals Cracks Down on Fraudulent Claims

Following the revelation, the Income Tax department has initiated a detailed audit of tax returns from 2021-22 to 2023-24. To tackle the issue, the authorities are:

Issuing notices to employees who made suspicious refund claims.
Sending SMS and email alerts, urging them to reassess their tax filings.
Allowing defaulters to file an updated return (ITR-U) by March 31, 2025.

Heavy Penalties Await Tax Fraudsters

Employees who fail to withdraw false claims before the deadline will face a 200% penalty on the fraudulent deductions.

In one instance, 430 employees from a single IT firm collectively claimed Rs 17.8 crore under Section 80GGC, averaging a tax refund of Rs 4.2 lakh per employee.

Conclusion

The Rs 110-crore I-T scam exposes a widespread misuse of tax exemptions through fake political donations. With authorities tightening regulations, IT professionals involved in fraudulent claims must act swiftly to avoid severe penalties.