If you've evaded taxes by donating to unregistered political parties and fake NGOs, read this warning from the IT department; trouble is certain

The department is preparing to crack down on taxpayers who claim exemptions by falsely claiming deductions on their income tax returns. The Central Board of Direct Taxes (CBDT) is in action mode. 

The department has identified intermediaries and taxpayers who were claiming fraudulent deductions and exemptions when filing taxes. They have been warned to correct their returns.

The CBDT has provided detailed information regarding this matter. The department stated that through its data-driven approach, it has found that many taxpayers are claiming fraudulent deductions and exemptions in their ITRs. 

These claims are being made inappropriately under the Income Tax Act. Specifically, fraudulent claims are being made under Chapter VI-A, Section 80G or 80GGC, in the name of donations. This means that people are trying to evade taxes by pretending to be donations, but these donations are not genuine.

The CBDT stated that these large-scale fraudulent donations were being made in the name of unregistered political parties or charitable institutions and trusts. 

Upon checking the registered addresses of these organizations, it was discovered that many were closed at the time of the donation or were never operational. This suggests that this is all fraudulent.

How did you find out all this?

The CBDT has strengthened its high-risk, data-driven approach. Data analytics revealed a pattern of donation claims being made to suspicious organizations. 

Corporate Social Responsibility (CSR) funds are also being used fraudulently, meaning companies are reporting fraudulent donations. Individuals are using CSR funds to evade taxes. Evidence of this has been gathered.

Information given to taxpayers

The CBDT has begun sending SMS and email advisories to taxpayers whose returns have been found to contain suspicious donation claims, effective December 12, 2025. These messages clearly advise taxpayers to review their returns and update them if necessary.

What should taxpayers do?

Every taxpayer is advised to keep their correct mobile number and email ID updated at the time of filing their ITR to avoid missing any messages or emails. If there is a fraudulent claim, quickly file an updated ITR return. 

This facility is available under Section 139(8A). Complete information on deduction provisions and filing updated returns can be found on www.incometax.gov.in. Go there and check. 

The CBDT has launched a targeted "NUDGE" campaign to detect fraudulent claims. NUDGE refers to a mild warning or reminder sent to taxpayers to bring them back on track. The department has recently issued a notice regarding this.