Once the ITR is submitted and verified by the tax payer, the department goes through every return in automated/manual fashion to check if everything was correct and matches with the data available with them. In case they find a wrong/doubtful entry or have further questions about any declared or undeclared income or deduction or exemption, they send communication to the tax payer for further verification. This is the TAX NOTICE – the most dreaded thing for tax payers.
However please note that most notices are harmless (and some times happy as its about tax refund), as they ask for some more details or inform about mismatch of your tax returns from Form 16/16A/26AS. This is the reason why we suggest to always match your ITR with Form 26AS. The important thing to know is notice is received under which section, what it means and what you need to do?
We list down the common tax notices sent and how to deal with the same.
This year many tax payers are receiving tax Notice Section 143(1A). The reason for the notice is because of discrepancy in the income or deduction mentioned in the tax return and Form 16/16A or Form 26AS. The most common reason being not including interest income in returns, not submitting investment proof for tax saving or HRA to employer and claiming the same while filing ITR among others.
Time Limit to Serve the Notice: NA
Time Limit to respond: 30 days
What to Do?
The reply to the notice can be done online. The tax payer need to login to the income tax efiling website and reply through e-Proceeding. You may need to attach the relevant proofs in the reply.
If you have received tax notice 143(1)(A) of income tax act, here is a detailed guide on how to reply the same on income tax portal.
This is more of intimation than notice about the tax return you filed. This could be of three types:
Time Limit to Serve the Notice: Up to end of next financial year from when the return was filed. So for AY 2021-22 the notice can be served by March 31, 2023
Time Limit to respond: In case of Tax Due, the payment has to be done in next 30 days
What to Do?
In case there is full match, you need not do anything. In case of tax refund, the amount would be transferred in next few days to your bank account. For Tax due case, make tax payment in 30 days of receiving notice.
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This is the scrutiny notice that follows preliminary assessment of returns. This can be of 3 types depending on the severity.
Time Limit to Serve the Notice: Up to 6 months from the end of financial year from when the return was filed. So for AY 2021-22 the notice can be served by September 30, 2022
Time Limit to respond: As per the Notice
What to Do?
Collect all documents related to your income, expenditure and investment details for the year and meet with the Assessment Officer as stated in the letter. You can also send your representative if required. In case you do not respond to notice or not meet the assessment officer following actions can be taken:
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Notice under Section 139(9) is sent if the ITR was defective. This can mainly be because of following reasons:
This is just an indicative list.
Time Limit to Serve the Notice: NA
Time Limit to respond: 15 days. Extension possible by writing to your assessing officer
What to Do?
In case you do not respond the return filed is considered invalid. The tax payer needs to download the correct ITR Form and select the option `In response to a notice under Section 139(9) where the original return filed was a defective return.’ Quote the reference number and acknowledgement number and fill the ITR form with rectifications as required.
Then login to the income tax efiling website and Select e-file >>`e-file in response to notice us 139(9)’ and upload it using the password in the notice.
Tax payers receive this notice if any income has not been disclosed and has escaped assessment.
Time Limit to Serve the Notice: If the income is less than Rs 1 Lakh, the notice has to be sent within 4 years from the end of assessment year and within 6 years if the income is more than Rs 1 Lakh.
Time Limit to respond: 30 days or as specified in notice
What to Do?
The tax payer needs to file the return of the assessment year as asked by the assessing officer.
Taxes eat a large chunk of returns that we make on investments. Keeping this in mind we have compiled list taxes applicable for most common investments in India. We cover everything from fixed deposit to stock markets to real estate.
This is the new section introduced in Budget 2017 and applicable from assessment year of 2018-19. According to this the tax payer would have to pay a fine of Rs 5,000 if the tax return is not filed by due date. In case the tax return is not filed even by December 31, the penalty would increase to Rs 10,000. However for income up to Rs 5 Lakh the fine would not exceed Rs 1,000.
Time Limit to Serve the Notice: NA
Time Limit to respond: NA
What to Do?
From next year file your returns on time!
We hope a brief review of all tax notices would help you to be better prepared in case you receive it. Do not panic and consult an expert in case of any issues!
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View Comments
Well explained.
These days reading about tax notices to be handled online. So, for example a Tax Notice Section 143(2), is it still required to meet the AO, or is it supposedly handled online/email?
All the ways that can be used to face the Tax Notice are discussed elaborately. Got a clear idea that we need not panic on receiving the tax notice and how to deal with it.
nice information .
Thank You For This Great Info About Tax Notices.