CBDT denies reports of special initiative to reopen tax cases on HRA claims

New Delhi, April 8 (IANS) – The Central Board of Direct Taxes (CBDT) has clarified that there is no special drive by the Income Tax Department to re-open cases on issues related to HRA claims. The CBDT reassured taxpayers that any concerns about retrospective taxation on these matters are unfounded.

The CBDT stated, “Data analysis was carried out in some high-value cases of mismatch between the rent paid by the employee and the receipt of rent by the recipient for FY 2020-21. This verification was done in a small number of cases without re-opening bulk of the 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 objective of the e-verification was to address cases of mismatches of information for FY 2020-21 without impacting others, according to the CBDT statement. The CBDT emphasized that there is no ongoing special drive to re-open such cases and dismissed media reports implying otherwise.

Certain instances of mismatch of information have been flagged by the Income Tax Department in routine verification exercises. Taxpayers have been alerted to take corrective action in cases where discrepancies are identified. However, social media posts and media articles have drawn attention to inquiries initiated by the CBDT into incorrect HRA claims made by employees.

The CBDT reiterated that reports of a large-scale re-opening of cases on HRA claims are inaccurate and reassured taxpayers that there is no cause for alarm. The department highlighted that the verification process is aimed at ensuring compliance and accuracy in income tax filings for the specified period only.