You should react to the income tax notification as soon as possible and supply all required documentation. Filing income tax returns (ITR) on time is required to avoid penalties from the income tax department. If your total earnings in a fiscal year fall within taxable income, you must file an ITR.
Taxpayers who fail to file their taxes by the due date receive notifications from the income tax department. Despite submitting the ITR far before the deadline, a few individuals may get income tax notifications in many circumstances.
Receiving an income tax notification does not usually indicate that you have done something wrong. It is important to note that you should react to the notification as soon as possible and supply the department with the essential papers and information.
The income tax agency may issue a notice to investigate specific areas of your ITR. Income tax notices are typically sent to taxpayers owing to differences between reported and real income, failure to register high-value transactions, inadequate paperwork, and late or non-filing of returns. You may also receive a warning if you claim excessive deductions.
Potential causes for getting a notice from the income tax department
Discrepancies between your stated and real income
The income tax department is always on the watch for persons who try to avoid paying taxes. If there is any difference between your shown income and your real income, you might face the trouble of receiving notice.
Failure to submit high-value transactions
Failure to reveal high-value transactions in the ITR will result in tax officials scrutinizing you. These transactions include big monetary deposits, the acquisition of real estate, or the purchase of luxury commodities. In order to combat black money and identify all unreported income, the income tax agency asks taxpayers to declare all high-value transactions.
If you fail to attach all of the needed documents while completing your ITR, the tax sleuths may send you a notice. It is recommended that you present all required papers in support of the deductions you claim as well as your total income in a fiscal year from all sources.
Late or non-filing of ITR
If you fail to file your tax returns on time or do not file them at all, the income tax department will almost probably send you a warning.
The income tax department picks the files for which tax returns must be reviewed at random. You have nothing to worry about if you have paid your tax taxes appropriately and on time.
If you claim excessive deductions, the ITD may send you a notice for further investigation.