ITR filing deadline ended on July 31, with around 7.28 crore income tax returns (ITRs) being filed. Of these crores of tax filers, many would have committed mistakes in filing returns either by choosing a wrong ITR form or not disclosing all sources of income, etc. But making errors while filing an ITR is quite common. The Income Tax Department sends notices to such taxpayers when it finds some mismatch or wrong entries or false claims.
The tax department intimates the taxpayers through emails about such notices, and it is important to follow a proper approach when responding to them. Notices can be triggered by various issues, such as delayed or non-filing of an ITR, non-payment of self-assessment tax, non-disclosure of income, or routine scrutiny. Let’s discuss the details of various income tax notices and how to respond to them.
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If you are a salaried employee and the company deducts and pays taxes on your behalf, it is mandatory for you to file an ITR. Remember, only those who have total annual income of less than Rs 3 lakh under the new tax regime and Rs 2.5 lakh under the old tax regime are exempted from filing an income tax returns. So if your company has deducted TDS from your salary, it means your salary is more than the basic exemption limits specified under the I-T laws. So failure to file an ITR may lead to receiving an income tax notice.
Also remember that even if you have filed an ITR one year but missed it the next, the tax department will send you a notice. Individuals who neglect to file their taxes can receive notices under several sections of the Income Tax Act, 1961, including Sections 139(9), 143(1), 143(2), 143(3), 245, 144, 147, and 148.
Here are some of the most common reasons why the Income Tax Department sends notices to taxpayers:
Non-filing due to TDS (Tax Deducted at Source):
If you are a salaried individual and your company deducts TDS, you still need to file an ITR. If you are within the ITR filing deadline, you can submit your income calculation and investment proof along with an acknowledgement letter. For filing after the deadline, you need to respond with your income calculation and investment proof to show that you have not evaded any taxes.
Do keep in mind that the income tax authorities also keep an eye on high-value transactions like bulk deposits, credit bill payments etc through the annual information report. So, make sure to be clear on all these transactions while filing for ITR.
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If you receive an ITR notice via email, you can reply to it online by logging onto the income tax e-filling website. Visit the compliance section, find your notice, and choose from one of the reasons for non-filing that are mentioned on the portal.
Income tax notice for delayed ITR filing:
The ITR filing deadline, which is July 31st, you are likely to receive a notice for not filing on time. It is important to file your income tax returns as soon as possible and include an ITR acknowledgement.
Income tax notice for credit mismatch:
If there is a mismatch between your tax credit and Form 26AS in the ITR, you will receive an IT notice. Verify your tax credits in the TDS and ITR against those in Form 26AS, and rectify any discrepancies. Update your income tax return details accordingly and file a revised version.
Income tax notice for non-disclosure of income:
You may receive a notice for not disclosing all your income. The tax department can find this information from various sources such as bank interest, tax deductions, and annual information returns. Verify your income calculations from various sources and compare them with Form 26AS. If you missed any income sources, update your ITR and file an updated version.
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So as a taxpayer, what should you do after receiving an income tax notice from the tax department?
Steps to follow on receiving a notice from the Income Tax Department:
- The first thing you should do after receiving an income tax notice is that carefully read it and understand the content. The Income Tax Department serves taxpayers notices under different sections of the Income Tax Act, 1961. Each type of notice serves a different purpose. Notices seek additional information, flag discrepancies in tax returns and also raise demand against pending dues.
- Check all the details like name, PAN number, and the assessment year mentioned in the notice. Ensure that the income tax notice is addressed to you and it is related to your tax filings.
- Authenticate the notice/order/letter issued by the income tax authority on the e-filing portal. Go to income tax e-filing portal and ‘Authenticate notice/order issued by ITD’ under ‘Quick Links’.
