Beware of ITR refund scam! You may lose lakhs with new income tax refund fraud - check I-T department advisory

| TOI Business Desk | TIMESOFINDIA.COM | Aug 16, 2024, 18:01 IST

Beware of Income Tax Refund scams! To avoid falling victim to suc... Read More

Beware of Income Tax Refund scams! The Income Tax Department has issued a warning to taxpayers, urging them to exercise caution against fraudulent refund schemes. The department has advised individuals to remain alert and vigilant against deceptive calls and pop-up notifications claiming they are eligible for a tax refund.

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To avoid falling victim to such scams, taxpayers are recommended to verify any communication from the I-T department through official channels. It is crucial not to respond to emails or visit websites that request sensitive information such as credit card numbers or bank account details.

A fraudulent message may appear as follows:

"You have been approved an Income Tax Refund of Rs, 15000/-, the amount will be credited to your account shortly, Please verify your account number 5XXXXX6777. If this is not correct, please update your bank account information by visiting the link."

According to an ET report, in a separate post, the I-T department shared an incident where an individual lost Rs 1.5 lakh after clicking on a fake refund message. The victim was directed to a fraudulent app, which resulted in his phone being hacked and money being debited from his account.

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Also Read | ITR refund status for FY 2023-24: How to check income tax refund status online

What is the Income Tax Department advisory on income tax refund scams?

The Income Tax Department has issued an advisory regarding potential fraudulent emails claiming to be from authorized representatives or directing individuals to supposed Income Tax websites. It is crucial to exercise caution and follow these guidelines to protect yourself from falling victim to such scams.

Firstly, if you receive a suspicious email - Do not reply! Engaging with the sender may lead to further complications.

Secondly, don’t open any attachments. Attachments may contain malicious code that will infect your computer. These attachments can harm your device and compromise your security.

Thirdly, don’t click on any links. If you have mistakenly clicked on links in a suspicious e-mail or phishing website then do not enter confidential information like bank account, credit card details. Clicking on these links may redirect you to fraudulent websites designed to steal your sensitive information.

Fourthly, avoid copying and pasting the link from the message into your browser. Phishers can make links look legitimate, but they may actually redirect you to different websites.

Lastly, Install and regularly update anti-virus software, anti-spyware programs, and a firewall. Some phishing emails may contain malicious software that can damage your computer or monitor your online activities without your consent. These protective tools help safeguard you from unintentionally accepting harmful files.

Also Read | New Budget 2024 rule: Why Income Tax Department is likely to issue a huge number of tax notices this month

How to report an Income tax refund fraud

If you come across an email or website that appears to be masquerading as the Income Tax Department, please take the following steps to report it:

1. Forward the suspicious email or website URL to webmanager@incometax.gov.in. You can also send a copy of the email or URL to incident@cert-in.org.in.

2. When forwarding the email, you have two options:

- Forward the message as you received it, or

- Include the Internet header of the e-mail, which contains additional information that can help trace the sender.

3. After forwarding the e-mail or header information to the appropriate authorities, delete the message from your inbox.

If you receive a phishing mail that is not related to the Income Tax Department, please forward it to incident@cert-in.org.in.

NPS vs PPF Calculator: Is NPS Better Than PPF To Become A Crorepati?

NPS vs PPF Calculator: Which is a better investment bet for retirement planning - National Pension System or Public Provident Fund? If accumulating a corpus of over Rs 1 crore is your aim, then both NPS and PPF are seen to be good investments, but which one should you pick? What are the minimum and maximum investment limits for NPS and PPF and what are returns? How do the tax benefits of NPS and PPF compare? We take a look at some PPF and NPS calculations, average returns and other important aspects to compare the two schemes: (AI image)

NPS vs PPF: In NPS the minimum annual investment is Rs 6,000, while there is no upper limit on investments. On the other hand for PPF accounts, the minimum annual investment is Rs 500 and the maximum you can invest in a year is Rs 1.5 lakh. (AI image)

Public Provident Fund Calculator: Assuming that a person starts investing in PPF at the age of 30 and continues to do so till the age of 60, that is for a period of 30 years (15 years minimum lock in plus 3 block extensions of 5 years) or 360 months, then a monthly contribution of Rs 12,500 or an annual contribution of Rs 1.5 lakh with an interest rate of 7.1% will result in a corpus of over Rs 1.5 crore. (AI image)

National Pension System Returns: There are four Asset Classes - Asset class E - Equity and related instruments, Asset class C - Corporate debt and related instruments, Asset class G - Government Bonds and related instruments and Asset Class A - Alternative Investment Funds including instruments like CMBS, MBS, REITS, AIFs, Invlts etc. Here we are looking at the average returns over 7 years from Scheme A, Scheme G, Scheme E and Scheme C, as provided by FinFix Research. The average return from Scheme A is at 7.55%, for Scheme G is 7.74%, for Scheme E is 15.56% and for Scheme C it stands at 7.56%. (AI image)

National Pension System Calculator: According to FinFix Research, with a monthly contribution of Rs 12,500/- or an annual contribution of Rs 1.5 lakh, over a period of 30 years you will get a corpus of over 1.7 crore from Scheme A, Scheme G and Scheme C. However, if you are not risk averse and invest in Scheme E, you will get over Rs 9.9 crore at the average return of 15.56%. It’s important to remember that these calculations are based on average returns over a 7 year period. With a 30 year time horizon for investment in mind, the returns are bound to differ. (AI image)

NPS vs PPF tax benefits: The maximum amount of yearly investment in PPF, that is Rs 1.5 lakh, is exempt from tax under Section 80C. Additionally, PPF is a EEE product, which means that the interest earned and the maturity proceeds are fully tax exempt. In case of NPS, tax exemptions up to Rs 2 lakh (1.5 lakh + Rs 50,000) are available. At the time of maturity, 60% of total corpus is tax exempt, the remaining 40% invested in annuity is also exempt, but income earned from the annuity is taxable depending on your tax slab. (AI image)

NPS Vs PPF: The liquidity in both NPS and PPF is low because both have a long lock-in period. While PPF is a risk-free option with its sovereign guarantee, NPS risks depend on the scheme you pick, with the equity option being higher risk. (AI image)

NPS vs PPF: An Indian citizen in the age group of 18 to 70 years can open an NPS account, whereas any citizen above 18 years can open a PPF account. However while NRIs can open NPS accounts, they can’t opt for PPF. (AI image)

NPS vs PPF: In NPS, you have the freedom to choose your investment portfolio, a flexibility not available in PPF. NPS has evolved to offer even greater flexibility, allowing investors to adjust their asset allocation up to four times a year. Importantly, switching between asset classes or changing pension fund managers has no tax implications. (AI image)

NPS vs PPF: For NPS partial withdrawal is allowed only after 10 years. To exit NPS before retirement, 80% of the corpus has to be used in buying an annuity plan. In case of PPF, partial withdrawals are allowed from 7th year onwards under specific conditions. (AI image)

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Top Comment

manish

121 days ago

ITR scams , UPI scams , Courier scams , Bank OTP scams , investment scams , SIM jacking scams ...Why has India become the world leader in scams ? Many of the people who used to work in legit call centers & BPOs have become scammers after their call centers shut down .

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Beware of ITR refund scam! You may lose lakhs with new income tax refund fraud - check I-T department advisory

What is the Income Tax Department advisory on income tax refund scams?

How to report an Income tax refund fraud

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