How a Meerut slum woman masterminded a Rs 357 crore income tax return fraud from a 25-sq-yard home

The Income Tax Department has busted a nationwide fraudulent tax refund racket allegedly run by a 30-year-old woman from a slum in Meerut. Officials said the accused, Nancy Agrawal, created fake deductions worth Rs 357 crore over three years and used them to secure around Rs 65.5 crore in fraudulent refunds for more than 3,000 clients across the country. The racket came to light on Tuesday after coordinated raids by the Meerut Income Tax Investigation Unit.

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The case is among the largest tax refund frauds uncovered by the department in recent years. It shows how a single individual, operating from a 25-square-yard home, allegedly built a client base spread across states by misusing a tax provision meant for political donations. The department has now started prosecution proceedings against Agrawal and is sending notices to her clients to recover the fraudulent claims.

How the racket worked

Agrawal worked as an accountant with a small firm. Investigators said she used this background to exploit loopholes in the income tax system.

Officials said she spent the last three years "systematically exploiting Section 80GGC of the Income-tax Act", which allows individuals to claim tax deductions for donations made to political parties.

Agrawal allegedly fabricated large donations to unrecognised political parties on behalf of her clients. These fake donations were then used to claim deductions the clients were not eligible for, resulting in inflated tax refunds.

Nationwide network built on referrals

Agrawal ran her operations from her home in Meerut, where she lives with her parents and younger brother. From this base, she allegedly built a client network that extended across the country.

"Agrawal built a nationwide client network through referral discounts, luring mostly salaried individuals into claiming ineligible deductions," officials investigating the case said.

To grow her client base, Agrawal offered discounts to existing clients if they brought in new customers willing to file false income tax returns.

Raids and seizures

The raids on Tuesday covered four premises linked to Agrawal. Officials also opened two of her bank lockers during the operation.

The search led to the seizure of Rs 5 lakh in cash. Officials also found fixed deposits worth Rs 4 crore.

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Investigators recovered documentary and digital evidence, including handwritten ledgers, computers and laptops that detailed Agrawal's client network.

The department has started proceedings to prosecute Agrawal. It is also sending notices to the beneficiary taxpayers to recover the fraudulent refund amounts.

Officials said the clients are mostly salaried individuals who were drawn in by Agrawal's promise of high refunds through fabricated exemptions. Officials said some clients may have known the claims were false, while others may not have.

A detailed investigation into the full scale of the fraud is currently underway.