ACCOUNTING & TAX
RESPOND INCOME TAX NOTICES
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OVERVIEW
INCOME TAX NOTICES
The Income Tax Department distributes the notices for a variety of reasons, such as failure to file income tax returns, errors made in filing returns, or other situations where the tax department needs more information or documents. The warning that is received is not startling or terrifying. However, before taking any action to comply, the taxpayer must first comprehend the notification, its purpose, and the requestor’s instructions.
Taxkey provides individuals and businesses with a full range of services to assist them in keeping up with compliances. If you receive an income tax notice, get in touch with a Taxkey professional to better understand it and decide what to do.
REASONS FOR NOTICE
WHAT ARE THE PRIMARY REASONS FOR NOTICE?
- Differences in the stated the amount of TDS
- An error on your tax return
- Failing to submit the necessary documentation
- When you make investments in your spouse's name but fail to disclose this on your income tax returns
- If during the fiscal year high-value transactions were made but weren't correctly disclosed in the income tax return
- If the assessing officer examines your income tax return at random
- The improper reporting of capital gains from sale of investments and assets
- Using the incorrect income tax return form to file the income tax return
- If your refunds may be used to offset the tax due from the prior year, do so
- If you have intentionally avoided paying taxes in the past
- When you voluntarily avoid income generated through capital gain or any other resources
- Digital asset transactions (Crypto, Bitcoin)
TYPES OF INCOME TAX NOTICE
TYPES OF INCOME TAX NOTICE
Type of Notice |
Description |
|---|---|
|
Notice u/s 143(1) - Intimation |
One of the most typical income tax notifications is this one. The income tax department sends this notification in an effort to get a response to mistakes, false assertions, or discrepancies in a submitted income tax return. After getting this warning, a person has 15 days to amend the return. |
|
Notice u/s 142(1) - Inquiry |
This notice is sent to the assesse when the return has already been filed but more information and supporting documentation is required to finish the process. This notification may also be sent to collect further documentation and information from the taxpayer. |
|
Notice u/s 139(1) - Defective Return |
If the filed income tax return omits or contains inaccurate information, an income tax notification pursuant to Section 139(1) will be sent. If a tax notice under Section 139(1) is issued, you have 15 days to fix the return's error. |
|
Notice u/s 143(2) - Scrutiny |
If the tax officer is dissatisfied with the information and documents provided by the taxpayer, an income tax notice pursuant to Section 143(2) will be issued. The Income Tax administration will choose certain taxpayers who get notice under Section 142(2) for close examination and will ask them to provide further information. |
|
Notice u/s 156 - Demand Notice |
The Income Tax Department issues this style of notification when the taxpayer owes any tax, interest, penalties, or other amounts. The amount that is unpaid and owed by the taxpayer is specified in each demand tax notice. |
|
Notice Under Section 245 |
A notice u/s 245 can be issued if the officer believes that tax has not been paid for the prior years and he wishes to set off the current year's refund against that demand. However, the individual must have received adequate notice and a chance to be heard before the demand and reimbursement may be adjusted. The receiver must reply to the notice within 30 days from the day the notification. The evaluating officer may assume that the person has given consent if they don't react within the allotted time and move forward with the evaluation. It is thus advisable to reply to the notification as soon as possible. |
|
Notice Under Section 148 |
The officer could have grounds to suspect that you underreported your income and that you subsequently paid less in taxes as a result. Even if you were legally required to file your return, the individual may not have filed one at all. This type of evaluation is known as income fleeing. The tax officer has the right to assess or evaluate the income in various situations, depending on the specifics of the case. The tax officer shall give the assesse a notice requesting his income return before conducting such an assessment or reassessment. This notification is published for this reason in accordance with Section 148's guidelines. |
|
Notice Under Section 148a |
The Assessing Officer (AO) may send a notice to an individual who has not provided a return of income, report, or statement of financial transaction under Section 148A. If the AO has reason to believe that the person has failed to provide a return of income under section 139, a report under section 92E, or a statement of financial transactions or reportable account under section 285BA, the AO may issue the notice under section 148A. |
|
Notice Under Section 131 |
The notice under Section 131 typically appears when the AO suspects that you may have been hiding funds. If you recently purchased a property, you can be requested to provide proof of that purchase and the financing that went into it. You can carry it out electronically in this situation. |
|
Notice Under Section 147 |
The Assessing Officer may assess or evaluate any income that is subject to tax if he has reason to suspect that it has eluded assessment. A notice pursuant to section 148 will be published for this reason. Any additional income that escapes assessment and later comes to the Assessing Officer's attention during the action under Section 147 may be included in the assessment once the assessment has been reopened. |
|
Notice Under Section 271 (1b) |
According to section 271(1)(b) of the Income Tax Act of 1961, a person who disobeys a notice under section 142(1) is subject to a penalty of 10,000 rupees in addition to any tax that may be due by him in each instance. |
|
Notice Under Section 271 (1c) |
Section 271(1)(c) cast responsibility upon the AO to reach a clear finding concerning the levy of penalty under the specific charge. If the AO fails to do so then the penalty cannot be levied as such penalty order shall not be maintainable in the eyes of law. It is noticed that the AO in the penalty order has levied the penalty under both the charges, i.e. concealment of particulars of income and furnishing inaccurate particulars of income.
|
DOCUMENTS REQUIRED
DOCUMENTS NEEDED TO RESPOND TO A NOTICE OF INCOME TAX
Depending on the type of income tax notification given to the taxpayer, different documents are needed. To respond to an income tax notification, the following fundamental documents are required:
- Copy of the Income Tax Notice.
- Proof of Income source such as (Part B) of Form 16, Salary receipts, etc.
- TDS certificates, Form 16 (Part A)
- Election ID card
- Source of Income Evidence
- Expenses Evidence
- Books of Accounts
- NRI – Status proof
- All bank accounts including loan accounts
- Credit card Statements
- Cash deposit/withdrawal slips or vouchers
However, it is best to simply verify the notification from the Tax professionals. The tax specialists will therefore analyze the Income-tax notice copy and offer the best possible solution.
PROCEDURE
PROCESS TO REPLY TO AN INCOME TAX NOTICE
The taxpayer must put together a reply within 30 days of receiving the intimation notice required by Section 143(1) of the Income Tax Act of 1961. If a reply is not given within the allotted period, the income tax returns will be processed with the appropriate adjustments without giving the taxpayers a chance to object.
When there is a notice asking to file defective or revise return, you can file it through by CPC within 15 days of the notice date. Rectification returns can be filed only when the taxpayer discovers a flaw or inaccuracy in the order sent by the Income Tax Department.
If the intimation notice includes a demand for the payment of additional tax, it should be regarded as a notice of demand under section 156. When a notice of demand is received, the taxpayer has 30 days to answer or face a fine from the assessing officer that includes 1% interest per month from the notice of demand’s receipt date.
At this point, you can go with two decisions:
1) Payment must be done by accepting the notice received.
2) If you wish to challenge the notice, you can proceed for appeal within 30 days from the notice date.
For ease follow up, you can hire an Authorized Representative (AR) and provide all required documents. You might ask them to speak on your behalf or to be at your side throughout the proceedings.
Appeal may come in favour of the assesse or to the department. In case, the judgement is not satisfying, you can further appeals through Income Tax Appellate Tribunal (ITAT).
TAXKEY CAN DO FOR YOU
WHAT TAXKEY CAN DO FOR YOU?
Taxkey is a trustworthy portal in India that offers support to people and companies receiving income tax notices. A team of seasoned experts with a thorough understanding of income tax regulations and rules makes up Taxkey. They may offer you professional advice and support as you work your way through the convoluted procedure of replying to an income tax notification. A simple and practical method of responding to income tax notices is offered by Taxkey.
We make income tax notice services available to people and companies of all sizes with reasonable pricing options. We keep the entire process transparent and updates you at every turn. You can follow the development of your case and get frequent updates. You can avoid penalties and interest fees by replying to income tax notices as soon as possible with the help of Taxkey.
FAQS
FAQS
Yes, an income tax notice might be received by a salaried individual as well. Every taxpayer receives a notification from ITD pursuant to Section 143(1). However, if ITD believes that you have concealed income or for any other reason, you may still receive additional income tax notices.
Any notices that ITD has issued will be sent to your registered email address. You can check the notices you've received using the income tax site. By selecting "Authenticate notice/order issued by ITD" from the list of quick links on the Income Tax website, you can also verify the legitimacy of the notices that have been issued.
You should comprehend the purpose of receiving an income tax notification if you receive one. There are several reasons why notices could be sent. For instance, Notices may be sent for the information and documents the Income Tax Department requires, and they must still be submitted. In this situation, you must submit the necessary information. Notices may be sent to correct errors in the ITR if there are If this is the case, you should make any necessary corrections to your return and reply to the notice as soon as possible to avoid potential fines.
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