Although the IT Department has made the ITR filing process easy and uniform, taxpayers make many mistakes. People make different types of mistakes while filing ITR, like choosing an incorrect form, feeding inaccurate income, being taxable, forgetting to verify ITR, etc.
Because of these issues, people receive income tax notices from the IT Department. But you don’t have to worry about the notice instantly in this situation. Instead, check why you have received the letter and what you can do about it.
What to do About Income Tax Notice?
First of all, there are different types of income tax notices you should know about:
If your tax return is found to be incomplete or contains inaccurate information, the tax authorities will issue a notice per Section 139(1). This notice will require you to address and rectify the discrepancies within 15 days of its issuance.
When the tax officer expresses dissatisfaction with the information or documents provided in your tax return, you will receive a notification under Section 143(2). As a taxpayer, you will be requested to furnish additional information to review your tax affairs thoroughly.
The Income Tax Department may serve under Section 156, often called a demand notice, if you have outstanding tax liabilities, interest, penalties, or other dues. The notice will transparently specify the amount owed and the relevant details.
When the officer issues a demand under Section 245, indicating that you owe taxes from previous periods, they may consider deducting this amount from your current-year tax refund. However, any such adjustments will be made only after providing you with ample notice and allowing you a fair chance to respond within 30 days.
How to Handle the Notices?
Ensuring a proper and timely response to these notices holds paramount importance. Section 143(1) mandates 30 days for your response. A thorough look at the identity information furnished in the notice, encompassing details like your name, address, and PAN number. Additionally, verify the assessment year and e-filing acknowledgment number for their correctness. If any errors were inadvertently made while filing the initial ITR, take prompt action to submit the updated returns within 15 days.
Should you find any errors or inaccuracies in the Income Tax Department’s order, promptly file a rectification return. Analyze the reason behind the notice and compare the income reported in Form 16/16A/26AS with the income specified. To avoid interest and penalties, responding to a demand notice issued under Section 156 within the given 30-day period is of utmost importance.