REPLY TO TAX NOTICE

 

Basic Information

 

Communication or Correspondence received from Tax Department to comply or to clarify for the discrepancy found in Income Tax Return is called as Tax Notice. Notices can either be sent by post or e-mail. Tax Notice is issued under specific section of the Act. Notice usually specifies the issue raised and the time to comply for the same.

 

Eg. Income Tax Authorities issues Notices for different reasons such as :

Notice for Non-filing of Income Tax Return

Notice for Delayed ITR Filing

Notice for Non-Disclosure of Income

Notice for Tax Credit Mismatch (includes Difference in TDS Claimed and TDS deducted by employer)

Notice for Non-Payment of Self-Assessment Tax

Notice Under Section 142(1) for preliminary investigation

Notice Under Section 143(2) for detailed investigation (Scrutiny)

Notice Under Section 245 for adjustment of refund with any demand due

Notice Under Section 139(9) for filing defective return

Notice Under Section 234F for late filing of I.T.Return (Penalty of Rs.1000, Rs.5000, Rs.10000 as the case may be).

 

If you have filed ITR for one year and not filed in the following year, or you have performed high-value transaction and not filed ITR, then you may get a notice from IT Department for non-filing of ITR.

 

The high-value transactions in a financial year include :

  • Cash Deposit of Rs. 10 lakh or more in a Savings Account.
  • Investment in Mutual Funds/Other Investment Schemes worth Rs. 2 lakh or more
  • Buying or selling immovable property amounting to Rs. 30 lakh or more

 If you have not filed ITR for any year and you got a notice from IT Department, then you should specify your reason that why you did not need filed ITR and your reason should be valid as per law. And if you make any wrong assumption, you may file ITR if deadline is not already over.

 

If you are salaried person, contractor, professional service provider, TDS deducted from your Salary/Contract Fees/Receipts does not mean that you are exempt from filing return. Tax is deducted from your Salary/Contract fees/Receipts because your income has exceeded the limit specified in the Act.

 

If you have not shown any income in IT Return form on which TDS has been deducted or if IT department receives information from AIR about your undisclosed income like bank interest, income from share and securities the notice for Non-Disclosure of Income is issued by the IT Department.

 

Advantages

 

1. To avoid further Late Fee and Penalty for non reply of Tax Notice.

2. To comply as per the Provisions of Income Tax Act, 1961.