An Income Tax notice for you? What Steps to be taken after you receive an IT notice

Receiving notice from the Income Tax office can cause anxiety and unpleasant experience for everyone in general. While there could be a number of reasons why you could be served with a notice, responding to the notice appropriately is the key for sorting out the issue. Some of the reasons for the IT notice include-Delay in filing or non-filing of Income Tax returns, wilful non-disclosure of income or negligence to disclose income, investments made in the name of your spouse or family members etc. While some of the notice may entail serious consequences, others may be certain routine queries raised by the Income Tax Officials. Ignoring, not responding and sleeping over the notice is certainly not a thing to do here as it may have serious repercussions later. 

If an intimation notice under Section 143(1) of the Income Tax Act via email or SMS,  you will be required to act on the notice within 30 days of the receipt of notice. So the ONLY and the BEST THING TO DO is to respond. The motto here is to “ACT RIGHT AND ACT ON TIME”.   

STEP ONE

Seek professional help of a Qualified Chartered Accountant or Tax Consultant for further guidance in the matter. They have the necessary knowledge, experience and wherewithal to deal with such queries from the Income Tax Department.

You may also choose to handle the queries yourself. Make sure that you are to the point and are able to convince the IT officials through proper evidence and documentary proof.  

The e-filing website allows you to respond to the Income Tax Notice 

If you find the demand not right, login to the e-filing website and select the reason and justify in the window why the demand is not appropriate. You will have to mention the reason for disagreement and furnish all the necessary details for the same.

Under ordinary circumstances, you should be able to hear from the IT department within 10-15 days of time.

STEP TWO

Here is our simple guide on how to go about the IT notice: 

  • Acknowledge the income tax notice
  • Respond to the notice appropriately and furnish all the necessary documents in support of your information
  • File a rectified return. Pay the tax dues, if any within the stipulated time
  • In certain cases, where tax officials may want you to be personally present, be present on the date given. 
  • You can either be present in person or through a tax expert/tax professional who will respond appropriately.
  • Attach all appropriate proof of income/investment and documents in support of your case

The Good news however, is that not all IT notices are as bad as you think. 

There are several instances where you will be served with an IT notice for some mistake or omission in filing of the returns. Some of these instances are listed below: 

  • Filing Income Tax Returns by using a wrong form
  • Not reporting income from interest
  • Not reporting tax free incomes
  • Mistake in not reporting all your bank accounts
  • not declaring rent/expected rent
  • failure to update your income and revise your returns

The reason for a surge in IT-notices during the recent years has been due to improved monitoring and strict regulations such as Know your Customer (KYC), online filing of returns etc. What is more important for you to do when you are served with an IT notice is to 

  1. Taking Cognizance of the notice served
  2. Respond to the notice appropriately on time (generally 30 days is the tie given).