Income tax notice: The Income Tax Department sends various types of notices—for incorrect reporting, return mismatches, pending tax, or document verification. Each notice has a different purpose. It’s crucial to understand them promptly, gather documents, and respond on the portal. Learn the details.
Income tax notice: Receiving an income tax notice isn’t always a cause for alarm. Sometimes it’s simply a request for additional information or clarification regarding your tax return. Common reasons for receiving a notice include reporting incorrect income, failing to include tax-saving investments, or making inaccurate claims regarding tax benefits.
If you’re aware of the different types of tax notices, you’ll be able to stay compliant and avoid unnecessary penalties.
What is an Income Tax Notice?
An income tax notice is an official notification sent by the tax department, highlighting any errors in your return, such as incomplete information, pending filing, or unreported income. You may receive this notice whether you have filed your return or not.
These notices are issued under various sections of the Income Tax Act, and timely action is essential to avoid penalties or legal complications. The reasons for receiving a notice can be many: non-filing of returns, mismatches in income, verification of claims, or pending tax demands from the department. Therefore, responding promptly is crucial.
Types of Income Tax Notices/Intimations
1. Intimation under Section 142(1)
This notice is sent when the tax officer needs additional information or documents to support the claims made in your return. This occurs in two situations:
- You have filed a return but need more information.
- You have not filed a return and are asked to file it.
2. Notice under Section 133(6)
The purpose of this notice is to seek clarification or documentation. Situations like these may include:
- Your income exceeds the basic exemption limit, yet you haven’t filed your ITR.
- Income wasn’t reported correctly in your ITR.
- Your expenses appear to be significantly higher than your declared income.
3. Section 143(1) Intimation
This is sent after your ITR has been electronically processed by the Central Public Accounts Office (CPC). It states whether the department’s income calculations match your return. This is merely a preliminary investigation, also known as a summary assessment.
4. Section 143(2) Notice
This notice is issued if your response after Section 143(1) is unsatisfactory, or if you haven’t responded at all. It may ask for details about tax deductions, exemptions, profits, and other information so that the officer can conduct a thorough investigation.
5. Notice under Section 148
If the tax officer believes that some portion of your income has been omitted or that you have provided incorrect information, they can send a notice under this section. This can be sent even if you have already filed a return.
6. Intimation under Section 245
If you are entitled to a refund in one year and you owe tax in another year, the department can adjust your refund against that pending tax. This notice is issued for that information.
7. Notice under Section 156
If an assessment is completed and the amount of tax, interest, or penalty is found, a demand notice is sent to you.
8. Notice under Section 139(9) (Defective Return)
If any error, omission, or incorrect information is found in your ITR, it is called a Defective Return. The department sends you a notice, giving you the opportunity to correct it so that your return is completely correct.
What to do if you receive an Income Tax Notice?
- First, understand the reason for the notice.
- Check whether the notice is genuine by visiting the portal.
- Gather Form 16, bank statements, investment proof, etc.
- Write a clear and concise explanation and attach the necessary documents.
- Submit your response to the portal and preserve the receipt/acknowledgement.
- Keep an eye on the follow-up on both the portal and email.
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