The Central Board of Direct Taxes ( CBDT ) has responded to media reports suggesting a special drive to reopen cases related to House Rent Allowance ( HRA ) claims, clarifying that there is no such ongoing initiative. The department emphasised that claims indicating otherwise in media reports are inaccurate and do not reflect the department’s actions.
In a press release, the board explained that the Income Tax Department had recently observed instances of data discrepancies between taxpayer filings and department records during routine verification procedures. In light of this, the department promptly informed taxpayers to address these discrepancies.
However, concerns surfaced from social media posts and media articles regarding the CBDT’s purported initiation of inquiries into cases where employees allegedly made inaccurate claims regarding HRA and rent payments.
In response to mounting concerns, the CBDT reaffirmed fears of retrospective taxation or reopening cases tied to HRA claims are unsubstantiated. The recent data analysis by the CBDT primarily targeted high-value cases with discrepancies in rent payments for the fiscal year 2020-21.
The verification process was conducted in a limited number of cases and did not entail a widespread reopening of cases, particularly given that taxpayers had until March 31, 2024, to file updated returns for the fiscal year 2020-21 ( Assessment Year 2021-22 ).
The board highlighted that the purpose of the e-verification initiative was solely to address discrepancies identified for the fiscal year 2020-21, without affecting other tax assessments.
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