Across India, tax season has become a fertile hunting ground for fraudsters. From threatening phone calls posing as tax officials to carefully crafted emails promising refunds, a growing ecosystem of scams exploits fear, urgency and gaps in public awareness—often with devastating financial and psychological consequences. Here are 10 common tax scams and how citizens can protect themselves.
1. Threatening Calls Claiming Immediate Arrest
Scammers call pretending to be officials from the Income Tax Department, Enforcement Directorate, CBI, or police. They threaten arrest, FIRs, or bank account freezes unless payment is made immediately.
These calls often use legal jargon, fake case numbers, and intimidating language to create panic and prevent verification. Victims are pushed to act within minutes, sometimes told not to inform family members.
2. Fake Emails and Messages Asking for Details
You may receive emails, SMS, or WhatsApp messages claiming a pending refund or unpaid tax. These messages often contain links to fake websites designed to steal PAN, Aadhaar, bank details, or OTPs.
Such messages closely resemble official government communication, using logos, formatting, and official-sounding email IDs. Once details are shared, accounts can be compromised within minutes.
3. Refund Theft Through Fake Tax Returns
Once fraudsters obtain PAN or Aadhaar details, they can file a tax return in your name and divert the refund. Many victims discover this only when they try to file later. This form of identity theft is increasingly reported during early filing periods, when criminals submit returns before genuine taxpayers.
4. Fake Charities Offering Tax Benefits
Scammers exploit disasters, health crises, or emotional appeals, promising tax exemptions for donations. They often use fake or expired registration numbers.
Donors are shown forged certificates or promised deductions under Section 80G, which later prove invalid.
5. Bogus Tax Preparers and Consultants
Some fraudsters pose as chartered accountants or tax professionals. They charge high fees, inflate deductions illegally, and route refunds to their own accounts. In many cases, victims unknowingly sign blank forms or share full access to tax portals, making them legally responsible for false filings.
6. Offshore Account and Black Money Lures
Scammers promise to help hide money abroad or avoid Indian taxes using foreign accounts or trusts. Such schemes are illegal under Indian law. Victims are often misled into believing these arrangements are “grey areas,” when they clearly violate FEMA and PMLA provisions.
7. Guaranteed High Refund Promises
Anyone who promises a much larger refund than legally possible is likely scamming you. Tax laws do not allow guaranteed outcomes. Fraudsters often estimate refunds without documents or encourage false claims to inflate amounts.
8. Fake Tax-Saving Investments
Fraudsters sell unregistered “tax shelters” claiming government approval. These schemes often collapse, leaving investors exposed to penalties. Many such products misuse terms like “special notification,” “budget-linked benefit,” or “exclusive government-backed plan.
9. “Free Money” and Special Rebate Scams
Scammers promise secret rebates, community benefits, or special schemes that don’t exist. Refunds are exaggerated and then stolen. These scams frequently target senior citizens, religious groups, or low-income communities through word-of-mouth networks
10. Pension and Social Benefit Refund Scams
Fraudsters target pensioners by promising large arrears or refunds through tax filings. Fake forms are used to steal funds or data. Victims may be told that benefits are “stuck” and require urgent processing through private agents.
What You Should Do
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Never share PAN, Aadhaar, OTPs, or bank details over phone or messages
Government departments, banks, and tax authorities do not ask for sensitive information through calls, emails, SMS, or WhatsApp. Treat any such request as suspicious, even if the caller claims urgency or authority. -
Do not make payments under pressure or fear
Scammers rely on panic to force quick decisions. Legitimate tax processes always allow time for verification, written notices, and formal procedures. Pause, disconnect, and independently check the claim. -
Verify all tax-related communication through official government portals
Access tax information only by logging in directly to official income tax or government websites. Avoid using links provided in messages or emails, even if they appear authentic. -
Do not click unknown links or download attachments
Malicious links and files can steal data or install malware on your device. Delete messages that prompt immediate action or request confidential details. -
Use strong passwords and secure login practices
Create unique passwords for tax and banking portals and avoid sharing login credentials with anyone, including agents or consultants. -
File tax returns early whenever possible
Early filing reduces the risk of identity misuse and allows quicker detection of suspicious activity linked to your PAN or bank account. -
Use only verified and trusted tax professionals
Check credentials, seek recommendations, and avoid preparers who promise guaranteed refunds or ask for blank signatures. -
Keep records of all tax-related communication
Save emails, messages, call details, and payment receipts. These can be crucial if you need to report a scam or dispute a transaction. -
Report suspicious calls, emails, or messages to cybercrime authorities
Prompt reporting helps authorities track patterns, block fraudulent accounts, and prevent others from becoming victims. -
Stay informed and share awareness with others
Many scams succeed because information does not reach vulnerable groups. Discuss common fraud tactics with family members, especially senior citizens and first-time taxpayers.
Awareness is the strongest defence. Staying informed and cautious can help prevent financial loss and emotional distress during the tax season.
