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Jul 18, 2025
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AI flags font flaw, helps Income Tax dept bust capital gains fraud
In a striking example of how artificial intelligence (AI) and digital forensics are revolutionising tax enforcement, the Income Tax Department has detected a fraudulent claim involving fake improvement bills used to evade capital gains tax. The case centres on a Hyderabad-based taxpayer who sold an immovable property for Rs 1.4 crore, but dramatically slashed his tax liability using falsified documents, according to TOI report.
Suspicion raised over 2002 expense bill
According to officials, the taxpayer claimed Rs 68.7 lakh as the indexed “cost of improvement” between 2002–03 and 2007–08, along with an indexed acquisition cost of Rs 73 lakh. As a result, he reported a long-term capital gain (LTCG) of just Rs 24,774 in his income tax return.
However, a forensic analysis triggered by suspicions over one expense bill dated July 6, 2002 — allegedly for Rs 7.68 lakh — led to the unravelling of the fraud. Advanced AI tools detected that the bill was written in ‘Calibri (body)’ font, which raised immediate red flags. Investigators pointed out that although the font was designed between 2002 and 2004, it was only publicly released by Microsoft in 2006 and became the default font for Office in 2007.
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