Meerut, Uttar Pradesh: The Income Tax Department has uncovered an alleged nationwide tax refund fraud racket and accused 30-year-old Nancy Agarwal of Meerut of orchestrating a ₹357 crore tax fraud. According to investigators, the accused allegedly misused provisions of the Income Tax Act over the past three years to secure fraudulent tax refunds worth approximately ₹65.5 crore for more than 3,000 taxpayers. Multiple searches conducted in connection with the case led to the seizure of cash, fixed deposits, and a large volume of documentary and digital evidence.
According to the Income Tax Department, the accused allegedly operated the entire network from a 225-square-foot residence in Meerut. Preliminary findings suggest that she used the experience gained while working as an accountant at a private firm to understand the income tax filing system and identify its vulnerabilities, which investigators believe were exploited to execute the alleged fraud.
Investigators claim that the accused systematically misused Section 80GGC of the Income Tax Act, which allows taxpayers to claim deductions on eligible donations made to recognised political parties. According to the investigation, numerous income tax returns allegedly contained fabricated claims of substantial political donations in order to obtain higher tax refunds. Authorities suspect that many of these claims were not genuine.
Officials further alleged that Nancy Agarwal built a nationwide client network by offering referral incentives and promotional discounts. Clients who introduced new taxpayers willing to file returns with inflated deduction claims were allegedly offered additional benefits. Investigators said that a majority of the clients were salaried individuals who were promised significantly higher tax refunds through these alleged false deduction claims. Authorities are examining whether the taxpayers knowingly participated in the scheme or were unaware that the claims being filed on their behalf were fraudulent.
The Income Tax Department’s Meerut Investigation Unit recently carried out coordinated searches at four locations linked to the accused and also opened two bank lockers. During the operation, officials recovered approximately ₹500,000 in cash, documents relating to fixed deposits worth around ₹40 million, handwritten ledgers, computers, laptops, and other digital storage devices. Investigators believe these records contain crucial information regarding the client network, tax filings, and financial transactions. The seized electronic evidence is currently undergoing forensic examination.
The investigation has now expanded to determine the geographical reach of the alleged tax refund racket and identify the role of other individuals or professionals who may have assisted in its operation. Authorities are analysing the seized documents and digital data to trace beneficiaries, associates, and the movement of funds. Officials indicated that the scope of the investigation could widen further as more evidence is examined.
The Income Tax Department has initiated prosecution proceedings in the case and has begun issuing notices to taxpayers who allegedly benefited from the fraudulent deduction claims and received excess tax refunds. Authorities said that if the claims are found to be false, the refund amounts will be recovered and appropriate legal and penal action will be taken under the provisions of the Income Tax Act.
The investigation remains ongoing. Officials stated that a comprehensive analysis of the seized financial records, banking documents, and digital evidence will determine the full extent of the alleged tax refund fraud, identify everyone involved, and establish the actual financial loss caused to the exchequer.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
