What To Do If You Get An IT Notice?

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Receiving a notice from Income tax department is something which is highly probable today, as notices are being triggered by the system automatically.

However, there is nothing to worry because most of the notices are meant to be replied online, and you need not visit the office or officer. Moreover today we have qualified professionals who can handle this at a lower cost and in a short span.

What to do when a notice is received:

  • Understand the reason for which notice has been sent, and the documents which the department is asking to submit.
  • Usually, a notice is to be responded within 30 days of time.
  • Check whether the notice is for meeting assessing officer in person (in most of the cases it will not be). In such a case, you need to take the required documents and approach the department. Professional assistance is very highly recommended in this case, to ensure that the case is not being represented wrongfully.
  • If not, you can respond to notice online itself – by logging into the e-filing portal. Even here the professional assistance is recommended if you are not sure of the contents of the notice.

Types of responses which can be submitted to a Notice/Intimation online:

  • Agree: If you agree with the grounds on which Notice has been sent, you can submit your response as “Yes Agreed” – and appropriate action like Revising the returns, or Payment of taxes has to be done.
  • Disagree: If you feel, notice is not triggered for justifiable reasons, you can submit the response as “Disagree with the Notice.” You can also send your comments, and attach the supporting documents in this case.
  • Partially Agree: If you identify, only a part of the notice is justified, then you can select this option, and then you can take the necessary action like Revising the return, or payment of taxes, etc.

What happens if Not Responded to the Notice?

In many cases, people ignore the notices which are received from the department, which is a gross mistake which will have the following consequences.

  • Penalties and Interest will keep increasing.
  • Non-response to notice might trigger further actions like Search – Seizure from the department.
  • No refunds will be processed for further years – until the notice is responded properly.
  • Refunds arising in the later years will be adjusted against demand in the notices.

Intimation vs. Notice:

People usually get confused between intimation from the department, and notice from the department. Most of the times, the emails which are being received from the department are intimations, in many such cases, no action is required from our side.

Every assessee will receive Sec. 143(1) intimation from the Income-tax department – which is the communication from the department that Return has been processed. However, in 143(1) intimation, a comparison will be provided between the income reported in return, and income as computed by the department. If there are any deviations here, return needs to be revised accordingly.

Few common reasons why Notices will be triggered:

Reason For Which Notice Is Received Recommended Action
Income reported in the income tax return is not matching with the Income as per Form 26AS (Form 26AS is where all the TDS details would be present) Revise the return and Report the income appropriately.
Wrong selection of Income Tax Return or incomplete details mentioned in Income tax return. The return should be revised, and it should be ensured that it is proper in all respects.
Non-filing of income tax return If the notice provides the option to file, please file it. If not, you have to visit the Assessing officer for Condonation of delay.
Exempted income has not been reported properly. Reporting of exempted income section wise is mandatory now. Even salaried employees should report their exempted parts of allowances and perquisites separately.
Purchase or sale of the property that was done during the year – but not reported accurately. Return needs to be revised if the claim mentioned in return is proper. If not “Disagree” with the notice can be selected.
High-value transactions done in the Bank account; however, they have not been reported in the Income-tax return (because IT department will receive the details of high-value transactions from all the banks annually). Revise the return if required, or respond to the notice with comments.
Claiming wrong deductions or claiming deductions improperly for the sake of refund or reducing taxes. This is a common mistake most of the salaried employees do. This will have serious consequences. A return should be revised and taxes should be paid, if any.
Shares allocated at premium and SFT return has not been filed. (Specified Financial Transactions return) For certain transactions, the filing of SFT return is mandatory, if not the department will trigger a notice, and we need to submit the transaction details in response to the notice.
Interest on tax payable calculated while filing tax returns are not accurate. The return should be revised and the difference amount should be paid.


What if the Physical Copy of Notice received is Lost:

Notice is usually sent over the mail as well as a physical copy will also be received at your registered address. In case if you have lost your notice, you can find the same on the e-filing portal under the For you Information/Action tab. Even if you are not able to find there, you can request for the notice once again under “My Account” tab.

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A Chartered Accountant by qualification and a speaker by passion. Has 5+ years of experience in Accounting, Taxation, and Advisory services. Has served large corporate giants like Hyundai, TVS, Mckinsey. And he is a regular speaker on various national forums of Institute of Chartered Accountants of India.

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