Hyderabad Man’s Tax Scam Foiled: AI Catches the Font That Didn’t Exist

In a striking example of how artificial intelligence (AI) is transforming fraud detection, income tax officials in Hyderabad exposed a taxpayer’s attempt to evade capital gains tax through falsified documents.

According to reports, the individual sold an immovable property for ₹1.4 crore, but declared an unusually low Long-Term Capital Gain (LTCG) of just ₹24,774 in his Income Tax Return (ITR). He reportedly claimed inflated deductions, including ₹68.7 lakh under ‘cost of improvement with indexation’ and an indexed acquisition cost of ₹73 lakh.

The discrepancies raised red flags among officials, particularly a suspicious expense bill dated July 6, 2002, claiming ₹7.68 lakh as renovation cost. Upon closer scrutiny, investigators found inconsistencies in bills submitted for property improvements between 2002 and 2008.

A forensic analysis using AI-powered tools revealed a crucial detail—the questionable bill was written in the Calibri font, which was not publicly available until 2006. While the font was designed between 2002 and 2004, it only became widely accessible with the release of Microsoft Office 2007, making its use in a 2002-dated document impossible.

This technical inconsistency led officials to conclude that the bill was fabricated. Upon confrontation, the Hyderabad-based taxpayer admitted to the fraud, withdrew the false deduction claim, filed a revised return, and paid the applicable tax on the LTCG.

This case underscores how AI is revolutionizing regulatory and investigative procedures, enhancing both efficiency and accuracy in detecting financial fraud.