time limits for different income-tax notices and the completion of assessments is crucial for taxpayers. The following table breaks down the essential sections of the Income Tax Act and the timelines for serving notices and completing assessments.
Key Steps for Income Tax Assessments
Re-assessment under Section 147
A taxpayer’s income has escaped assessment for FY 2020-21, and a notice is served in 2024. Under the updated timelines, if the notice is issued before August 31, 2024, it should be completed within 12 months. If issued after September 1, 2024, the process follows a 3- or 5-year deadline based on the complexity of the case.
Common Questions
Q: What happens if the assessment isn’t completed in time?
A: If the tax department fails to complete the assessment within the prescribed time limit, it cannot raise additional tax demands for that assessment year.
Q: Can I receive multiple notices for the same assessment year?
A: Generally, no. However, in cases of escaped income or new information, reassessment under Section 147 could apply.
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