Received notice from income tax department? These could be possible reasons
One can get a tax notice from the income tax (I-T) department for many reasons such as failing to file the income tax return on time, errors in calculation,incorrect reporting of income or claiming excessive losses.
Any taxpayer can come under the taxman’s lens anytime. The I-T department scrutinise the returns randomly to enforce tax compliance. In case you receive any notice especially under Section 143(2), then it means that your assessing office is scrutinising the return filed by you. The scrutiny can be related to inaccurate reporting, return filed and all the related documents or it can be based on the predefined criteria which is issued every year by the tax department.
It may be noted that in case you receive notice related to scrutiny, the first thing you should do is to check the validity of the notice and reply to it accordingly on time. Failing to respond on time may lead to a penalty of Rs 10,000 under Section 272A of the Income Tax Act. If you find any difficulty in replying to the tax department, seek professional Chartered Accountant’s help to file a reply in order to save yourself from being penalised.
You can avoid getting notice by reporting all your income and other income taxable in your hands. You must pay the full tax due and be tax-compliant. In case you come under scrutiny, you will be asked to produce documents and other pieces of evidence as proof of what you have claimed in your return.
Taxpayers are issued income tax notices generally under Section 143(1), 143(2), 143(3), etc., of Income Tax Act, 1961 regarding misreporting LTCG (long term capital gain) from equity, TDS claimed not matching with Form 26AS, not declaring investments made in the name of spouse, carrying out high-value transaction, etc……Read More>>