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The Income Tax Department sends notices for various reasons, such as not filing the income tax returns, any defect while filing the returns, or other instances where the tax department requires additional documents or information. Nothing is frightening or alarming about the notice that is received. However, the taxpayer first has to understand the notice, the nature of the notice, and the requestor's order in the notice, and then take steps to comply.
Solocorp offers a comprehensive suite of services to help families and businesses maintain compliance. If an income tax notice is received, contact the Tax Expert at Solocorp to understand the income tax notice and determine a course of action.
As mentioned above, An income tax department notice is a formal communication issued by the Income Tax Department to a taxpayer. It can relate to various aspects of income tax filing and compliance, such as requests for additional information, clarification of discrepancies in a tax return, audits, tax payment demands, or refund notifications. The income tax department notice specifies the details of what the department requires from the taxpayer, ranging from submitting specific documents to explaining income or deductions claimed.
There are several reasons why you might receive an income tax notice, including:
Let us understand the various types of notices or intimations issued by the Income Tax Department.
| Type of Notice | Description |
|---|---|
| Notice u/s 143(1) - Intimation | This is one of the most commonly received income tax notices. The income tax department sends this notice seeking a response to the errors/incorrect claims/inconsistencies in a filed income tax return. If an individual wants to revise the return after receiving this notice, it must be done within 15 days. Otherwise, the tax return will be processed after making the necessary adjustments mentioned in the 143(1) tax notice. |
| Notice u/s 142(1) - Inquiry | This ITR notice is addressed to the assessee when the return has already been filed, and further details and documents are required to complete the process. It can also be sent to require additional documents and information from a taxpayer. |
| Notice u/s 139(1) - Defective Return | If the income tax return filed does not contain all necessary information or contains incorrect information, an ITR notice under Section 139 (1) will be issued. If a tax notice under Section 139(1) is issued, you should rectify the defect in the return within 15 days. |
| Notice u/s 143(2) - Scrutiny | An income tax notice under Section 143(2) is issued if the tax officer is not satisfied with the documents and information submitted by the taxpayer. Taxpayers who receive notice under Section 142(2) have been selected for detailed scrutiny by the Income Tax department and must submit additional information. |
| Notice u/s 156 - Demand Notice | This type of income tax notice is issued by the Income Tax Department when the taxpayer owes any tax, interest, fine, or any other sum. All demand tax notices will stipulate the sum outstanding and due from the taxpayer. |
| Notice Under Section 245 | If the officer believes that tax has not been paid for the previous years and wants to set off the current year's refund against that demand, a notice u/s 245 can be issued. However, the adjustment of demand and refund could be made only if the individual has been provided proper notice and an opportunity to be heard. The recipient has to respond to the notice 30 days from the day of receipt of the notice. If the individual does not respond within the specified timeline, the assessing officer can consider this as consent and proceed with the assessment. |
| Notice Under Section 148 | The officer may have a reason to believe that you have not disclosed your income correctly and, therefore, have paid lower taxes. Or the individual may not have filed his return at all, even if you must have filed it as per law. This is termed as income-escaping assessment. Under these circumstances, the assessing officer can assess or reassess the income according to the case. Before making such an assessment or reassessment, the assessing officer should serve a notice to the assessee asking him to furnish his return of income. |
The Income Tax Act of 1961 outlines the procedure for issuing notice, orders, or other communications, which can be delivered in several approved ways.
Handling an income tax notice systematically is crucial for avoiding penalties or legal issues. Here are the steps you should take after receiving the notice.
Understand why the notice was issued. It will detail the specific concern or requirement the Income Tax Department has.
Ensure the notice is indeed for you by checking your name, PAN number, address, and the assessment year mentioned. This confirms the notice's authenticity and relevance to your tax affairs.
Determine what discrepancy or issue in your income tax return prompted the notice. It could be a mismatch in income, high-value transactions, or incomplete disclosures.
Acknowledge and respond to the notice within the given timeframe to avoid penalties or legal actions. The notice will specify the deadline for your response.
Support your response with all necessary documents and clarifications to fully address the department’s queries.
Confirm that the notice you received is also listed in your account on the Income Tax Department’s e-filing website. This ensures the notice's legitimacy and helps keep track of your responses and any further communication.
If the notice involves complex tax issues or you’re uncertain how to proceed, consider consulting an Solocorp tax expert.
The documents required to reply to an income tax notice vary depending on the type of notice served. The following are the basic documents generally needed to respond:
Solocorp can assist in responding to Income Tax notices through:
Our experts will provide personalized guidance to understand the Income Tax notice and recommend the right course of action.
We will carefully analyze the details of the Income Tax notice to identify any discrepancies or required actions.
We assist in compiling the necessary documents such as Form 16, TDS certificates, and proofs of income, ensuring that all relevant information is provided.
We will help you prepare a precise and timely response to the Income Tax notice, addressing all concerns raised by the department.
Our team ensures that your response complies with tax laws, minimizing the risk of further queries or penalties from the Income Tax Department.