NEW DELHI: After a massive nationwide operation, Central Board of Direct Taxes acted against several intermediaries involved in filing income tax returns with bogus claims of deductions and exemptions under the Income Tax Act.The move followed actions in July 2025, covering 150 premises, during which more than 102 suspicious RUPPs were identified for their role in facilitating bogus donation-linked deductions. Data analytics had flagged over 2 lakh taxpayers who claimed suspicious deductions under Section 80GGC, adding up to Rs 5,500 crore routed through suspicious or non-existent RUPPs and a similar amount of bogus donations to non-genuine charitable organisations, said officials.The enforcement findings have also prompted reversals of bogus deductions by taxpayers. Around 54,000 have already corrected their filings and withdrawn ineligible claims worth approximately Rs 1,400 crore and updated their returns after CBDT nudged them to revise their returns.Most of these taxpayers claimed deductions below Rs 5 lakh and a few companies claimed very high deductions.The exercise also revealed how intermediaries had established networks of agents to file returns with incorrect claims on commission basis. An intermediary was found to be advertising guaranteed refunds in cinema halls and on social media. It was found that there was a syndicate of professionals who was operating through WhatsApp and Telegram channels to find taxpayers looking at reducing tax liability through fake donations to RUPPs or charitable organisations.Instances of misuse of CSR-linked trusts, which facilitated bogus donation receipts in exchange for cash-back, were found during the probe.“It was observed that huge amounts of bogus claims have been made on account of donation RUPPs or charitable institutions and reduced their tax obligations and have also claimed bogus refunds.Evidence gathered from enforcement actions indicated that RUPPs many of which were non-filers, non-operational at their registered addresses, and are not engaged in any political activity were being used as conduits for routing funds, hawala transactions, cross border remittances and issuing bogus receipts for donations,” an official statement said.

Last Updated:December 14, 2025, 01:24 IST

The move is expected to provide an immediate and substantial boost to Nepal’s economy, particularly its tourism and hospitality sectors, which rely heavily on Indian visitors

The original restrictions on high-value Indian currency were severely tightened in Nepal following the 2016 demonetisation in India, which withdrew old ₹500 and ₹1,000 notes. Representational image

Nepal is preparing to officially permit the circulation of Indian currency notes above the ₹100 denomination, marking the end of a nearly decade-long ban that has significantly complicated cross-border travel, trade, and remittances between the two countries. The move, currently in its final stages with the Nepal Rastra Bank (NRB) preparing to publish the official notice, follows a crucial regulatory shift by India’s central bank.

The original restrictions on high-value Indian currency were severely tightened in Nepal following the 2016 demonetisation in India, which withdrew old ₹500 and ₹1,000 notes. Even after new notes were introduced, Nepal maintained the ban on all denominations above ₹100 due to concerns over the smuggling of counterfeit currency and security risks. This policy forced Indian tourists and Nepali migrant workers to carry large wads of low-denomination notes, leading to financial hardship, confusion, and frequent incidents of travellers being detained or fined for inadvertent violations.

India’s Regulatory Green Light

The pivotal change that has allowed Nepal to reverse course came from the Reserve Bank of India (RBI). In late November 2025, the RBI amended its Foreign Exchange Management Regulations, formally allowing individuals to transport higher-denomination Indian rupee notes across the border.

The new rule specifies that individuals can carry Indian currency notes of any amount in denominations up to ₹100. Crucially, they are now permitted to carry notes above ₹100 up to a total value of ₹25,000 in either direction—both into Nepal and back into India. This amendment effectively removed the main legal constraint that previously limited the practical utility of higher-value notes for travellers.

Boosting Tourism and Easing Remittances

The lifting of the ban is expected to provide an immediate and substantial boost to Nepal’s economy, particularly its tourism and hospitality sectors, which rely heavily on Indian visitors. Businesses in border towns, casinos, and pilgrimage routes that cater to Indian tourists have been vocal in lobbying for this change, as the previous restrictions limited spending power.

Furthermore, the decision is a massive relief for the estimated two million Nepali migrant workers in India, who previously faced major security risks when bringing home their earnings in small denominations. The Nepal Rastra Bank (NRB) spokesperson, Guru Prasad Poudel, confirmed that the process is nearing completion, stating they are preparing to publish the notice in the Nepal Gazette before issuing circulars to banks and financial institutions, ushering in a new era of smoother financial integration between the two neighbours.

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