The income-tax department notifies the defaulter when they discover a discrepancy in ITR filing. Get to know what has to be done in case of an income tax notice.
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An income tax notification is a written communication from the department of income tax to a taxpayer alerting them regarding a problem with their tax account. This is done for several reasons, including conducting an assessment, requesting additional information, or filing or not submitting an income tax return on time. The taxpayer has a specific amount of time to respond to notices sent by the income tax department.
No Request, No Refund Notice: When the income tax department discovers no errors on the taxpayer's filed tax return, this notice is furnished. The IT department has only informed that ITR is being handled and that there was no tax demand or refund.
Refund Notice: If the assessee has paid more tax than their obligation, they will be served with a refund notice informing them that their excess payment would be reimbursed to their bank account
Demand Notice: This demand notice will be given to demand the taxpayer to pay the tax owing within 30 days if the income-tax department discovers any gap in your tax payment after the computation procedure. Apart from this multiple notices are provided to the taxpayers.
It is crucial to reply to the notice within the given specific time frame. Make sure to use the instructions given below to complete the process.
TDS mistakes are one of the most frequent issues that lead to income tax notices. An employer or deductor submits the TDS reports late or incorrectly, which may result in receiving an income tax notice.
This notice is sent to explain the difference if the discrepancy is with the amounts reported in the returns. Differences that arise as a result of the person failing to record specific income, such as interest on FDs. The deduction was reported under the incorrect section. The information provided by the person is lacking.
The income-tax department may occasionally need certain supporting paperwork for the filed tax return. as soon as you get this.
The assessee who forgot to file the ITR may be reminded by serving the notice. There is a ₹5000 fine for late tax submissions. The unpaid taxes will also accrue interest at the rate of 1% per month starting on the due date.
To avoid paying taxes, many people opt to purchase assets in the names of their partners, children, or other close relatives. In this context, the term ‘assets’ refers to all types of investments, including real estate, homes, fixed deposits, mutual funds, bonds, debentures, etc. Assume you purchase mutual funds in your wife's name. Any income you get from these mutual funds is also regarded as your gross income under Section 64 of the Income Tax Act.
The corporation must notify the income tax authorities of large value transactions.
The assessee must pay wealth tax at the rate of 1% of the total asset value if the value of all assets possessed by them exceeds ₹30 lakhs. Here, the asset consists of benefits from the Section 143 income tax notification (1) The income tax division conducts an initial evaluation of all submitted returns and notifies taxpayers of the findings of such an initial assessment.
If the taxpayer does not respond to a notification sent to him under Section 142(1), Section 143(2), or a direction given under Section 142(2A), he will be subject to a penalty of ₹10,000 under Section 272A for each infraction.
To avoid penalties, you should immediately respond to income tax notices. If you are unaware of the procedure and need expert guidance then reach out to tax experts from Vakilsearch. We can always help you respond to income tax notices easily.
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