Giving information during a program on Monday, Union Finance Minister Nirmala Sitharaman had told that notices have been issued by the Income Tax Department to 1 lakh taxpayers of the country. Please tell here that there are many reasons, due to which you can get a notice, including non-filing of ITR, income-deduction or other types of information being found wrong.
Income tax department is continuously giving advice
Taxpayers are constantly advised by the Income Tax Department to give accurate information about all their investments and income while filing ITR, not doing so means filling wrong information in ITR. Can create difficulties for you and you can get a notice from the Income Tax Department. But usually taxpayers make minor mistakes, which becomes a cause of trouble for them.
Avoid mistakes while filing ITR
If a taxpayer gives wrong information in the Income Tax Return Form (ITR Form), then the Income Tax Department can send notices to him under different Acts. There are two types of scrutiny process of ITR, one is manual and the other is compulsory. But there are some precautions, keeping in mind that if you file income tax return, mistakes can be avoided and notices will not be received. Let us look at some such reasons, due to which the department can send a notice to you.
Not filing ITR: The Income Tax Department sometimes sends notices to taxpayers for not filing ITR. If you come in the tax slab, then it is mandatory to fill ITR. Suppose you are an Indian citizen. But you are the owner of foreign assets. In this situation also you will have to fill ITR. Otherwise the Income Tax Department can send you a notice.
Mistake in TDS: You should fill TDS carefully while filing ITR. If there is a difference between the TDS filed and where it is deposited, then you may receive a notice from the Income Tax Department. Therefore, before filling ITR, find out how much TDS has been deducted.
Undisclosed income You have to tell in ITR how much you earn in a financial year. Along with this, investment information also has to be given. In such a situation, if you hide the income from investment, then you may get a notice. To avoid notice, ask for a statement of interest from your bank and put it in ITR. Apart from this, give information about the income received from any other source as well.
Mistake in ITR return: Many times people make mistakes while filing income tax return. People forget to fill the necessary details. If this happens, the Income Tax Department can send a notice. Therefore, apart from filling it yourself, you can get ITR filled by a professional only.
don’t wait for the deadline
Along with advising to enter the correct information in ITR, it is also being continuously told by the Income Tax Department that do not wait for the last date of ITR Filing and get this work done as soon as possible. There is still five days left to file ITR. Its deadline has been set by the Income Tax Department as 31 July 2023. Actually, the risk of mistakes increases while filing tax in the last minute.
Keep one thing in mind here that if you have received an income tax notice, it does not mean at all that you have done something wrong. There may be a routine inquiry or you may be given a notice requiring clarification on some financial transaction.
Reasons for getting notice
Income tax officials can issue notices for a variety of reasons, ranging from non-filing of tax returns to verifying the income declared by the individual in the ITR filed. Tarun Garg of Deloitte Haskins & Sells LLP says that if the reason for the notice is the scrutiny of income tax returns already filed, then the notice lists certain information/documents to serve as proof of the data reported in the tax return. For example, the details of interest earned by a person can be sought in the notice.
A person can produce an interest certificate issued by a bank/financial institution as proof of interest income. On the other hand, if the question is on capital loss claimed on sale of the property, a copy of the documents evidencing purchase price, sale price may be sought through the notice.
Tracking made easy with online facility
Nowadays tax notices are being issued through the Income Tax E-Filing Portal (ITR E-Filing Portal), which has made it extremely easy to track the notices filed and responses to such notices. So, if you get a tax notice, keep these important things in mind as mentioned below.
Do not panic: The first and most important step is to remain calm and do not panic. Getting an income tax notice can be intimidating, but instead of panicking, it is important to exercise restraint. That’s why it is very important to understand the reason behind the Tax Notice. The Income Tax Department in its notice explains in detail the core issue along with the time limit.
Verify the notice: It is important for you to ensure that the notice you have received is genuine and is not a trap to obtain sensitive financial information. TaxNodes founder and CEO Avinash Shekhar says that the actual income tax notice usually contains the taxpayer’s permanent account number (PAN), a unique document identification number (DIN) and other important information. You can check the authenticity of the notice by visiting the official Income Tax Department website.
Understand the reason for the notice: To determine the issue of notice from the Income Tax Department, read the information entered in it carefully and understand it closely. The notice given to you may be related to under-reported income while filing ITR, discrepancies in tax payment, non-disclosure of certain financial transactions or any other tax-related matter.