Income Tax notice: Time to panic over your income tax returns filing?
Citizens pay income tax for various things. Sometimes they fail to divulge the real state of their income. This can happen unknowingly too. If that is the case and an Income Tax Returns notification is received by taxpayers then, is it time to start panicking? Income tax is a percentage that individuals/corporates pay from their earnings to the government in every financial year, as per their tax slab. A taxpayer is entitled to various deductions to save money under Section 80C and Section 80D. However, sometimes a notice can be received from the Income Tax department due to lazy behaviour or because of criminal intent to hide income. Check out why a taxpayer receives an I-T notice, but more than that find out what needs to be done to save yourself from big trouble. Photo: PTI
1. Income Tax notice under Section 143(1): This usually relates to arithmetical mistakes or changes that need to done. Photo: PTI
2. Income Tax notice under Section 143(1)(a): The Central Processing Centre (CPC) seeks clarification from a taxpayer in regards to mismatch between income and deduction when compared to Form 16, Form 16A or Form 26AS. Photo: PTI
3. Income Tax notice under Section 139 (9): When an I-T department comes across an error in filing of return like the information given by a taxpayer and the amount of return filed the notice is slapped on the taxpayer. He gets only 15 days time to clear the notice. Photo: PTI
4. Income Tax notice under Section 154: A rectification containing details of returns submitted by the assessee and the one computed by IT department is sought due to feeding wrong information and taking credit of taxes and deductions. Photo: Reuters
5. Income Tax notice under Section 245: Taxpayer is intimated for adjusting refund against demand. This notice is sent, usually, when tax authorities want to adjust outstanding tax demands from refund due. Such demands may concern to an earlier Assessment Year and when refund is claimed, the same is adjusted against the demand. Photo: Reuters
6. Income Tax notice under Section 142(1): The notice is sent to inquire into all details of the assessee before making an assessment, in cases where return has been filed, where it has not been filed, and the time specified to file such return has expired. Photo: Reuters
7. Income Tax notice - no need to panic: Considering the above, any income tax notice may cause panic among taxpayers, but in such a situation, they should carefully check the time allowed to respond to the notice. "A reply must be drafted and sent within the time allowed. A notice may be responded to online on the income tax department website," said Archit Gupta, Founder & CEO ClearTax. Photo: Reuters