💡“Income Tax Department Exposes Fake Deductions Using AI Tools”

🧠Artificial Intelligence is now a powerful weapon in the fight against tax fraud.

In a recent case from Hyderabad, the Income Tax Department used AI-powered tools and forensic analytics to expose a taxpayer who tried to evade taxes by submitting fake deduction claims.

🏠 The Case in Brief:

A taxpayer sold an immovable property for ₹1.4 crore. To reduce capital gains tax, the assessee claimed over ₹68.7 lakh as ‘cost of improvement’ — supported by indexed bogus bills dating back to 2002–2008.

One such bill, dated July 6, 2002, showed an expense of ₹7.68 lakh. However, it triggered suspicion.

🔍 What Went Wrong?

The Income Tax Department, using AI and generative forensic analysis, flagged discrepancies in the font and formatting of the bills.

🖋️ The analysis found that the text was printed in the ‘Calibri’ font, which was designed between 2002 and 2004, but not publicly released until 2007. This meant:

✅ The bill, supposedly from 2002, couldn’t have been printed using Calibri — clearly proving backdated forgery.

📉 The Outcome:

• The taxpayer could not produce original bills, only photocopies.

• Claimed that the documents were found in an old file belonging to their late father.

• But after clear evidence of fabrication, the assessee:

  
  

  • Withdrew the claim

  • Revised the return

  • Paid taxes based on actual capital gains, without inflated deductions.

  
  

🧠 The Bigger Picture:

This case reflects the growing power of Artificial Intelligence in:

• Detecting forged or backdated claims

• Identifying inconsistencies in historical data

• Strengthening tax compliance and revenue protection

From font forensics to document metadata, AI is transforming tax enforcement — making it harder for fraud to go unnoticed.

⚖️ Disclaimer:

This post is intended for general informational purposes only and does not constitute legal, tax, or financial advice. Readers are strongly encouraged to consult a qualified Chartered Accountant, tax advisor, or legal professional before taking any action based on the contents of this article.

The author or publisher shall not be held liable for any decisions taken without professional guidance. This post does not establish a client-consultant relationship.