On April 8, the Central Board of Direct Taxes (CBDT) denied many media reports that stated a special initiative had been started to revisit cases of taxpayers’ real rent payments being less than their house rent allowance (HRA).
“There is no special drive to re-open cases of mismatch, and media reports alleging that large-scale re-opening is being undertaken by the CBDT are completely misplaced,” the top direct tax council mentioned in a statement.
It further stated that concerns regarding retroactive taxation in this case are unfounded, and matters related to HRA claims should not be reopened.
“Data analysis was carried out in some high-value cases of mismatch between the rent paid by the employee and receipt of rent by the recipient for the FY 2020-21. This verification was done in a small number of cases without re-opening bulk of 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,” CBDT added.
