An income tax notice is a formal message from the income tax department. It’s not a big concern if you carefully read the notice and address any issues it mentions. Learn more here about what different types of notices mean and when you might receive them.
Section 139(9): Defective ITR
If there are mistakes in the Income Tax Return (ITR) you filed, the tax department may send you a notice under section 139(9) of the Income Tax Act, 1961. This notice asks you to correct the errors by submitting a revised ITR. It’s a way for the tax department to ensure that the information provided is accurate and in line with the tax regulations. Common Reasons for receiving notice is Discrepancies between the details in the ITR and the information available in Form 26AS, especially in terms of TDS (Tax Deducted at Source) details or Claiming deductions or exemptions incorrectly or without proper supporting documentation. This notice, under section 139(9), will be issued within nine months from the conclusion of the financial year in which the Income Tax Return (ITR) is submitted under Section 139 or in response to a notice under section 139(9). The notice will specify the response deadline, typically set by the income tax department at around 15 days, as suggested by professionals.
Section 143(1) Notice: Intimation
After processing your Income Tax Return (ITR), the income tax department sends this notice. It lets you know if your ITR calculations align with the department’s. If there’s a difference, the notice will inform you about a potential refund or if you owe additional taxes. You may receive this notice even if there are no discrepancies in your ITR. This notice, under section 143(1), will be issued within nine months from the conclusion of the financial year in which the Income Tax Return (ITR) is submitted under Section 139 or in response to a notice under section 142(1).
If the intimation notice is related to a refund or there is no discrepancy between your calculation and the tax department’s, no response is required. Yet, in the case of a tax demand, the taxpayer should respond within 30 days from the intimation notice’s issuance, indicating agreement or disagreement with the proposed adjustments.
Section 142: Inquiry before scrutiny assessment
This notice is issued because the income tax department seeks clarification on why the Income Tax Return (ITR) was not filed, despite the individual earning income above the basic exemption and having evidence of various income sources in Annual Information Statement, TDS etc. No specific time limit is set for issuing a notice under section 142(1). The notice will specify the response deadline, typically set by the income tax department at around 15 days, as suggested by professionals.
Section 143(2): Scrutiny Assessment
When the Income Tax Department finds it necessary to scrutinize an individual’s Income Tax Return (ITR) in detail, they issue a notice under Section 143(2) of the Income Tax Act, 1961. This scrutiny assessment involves a thorough examination of the taxpayer’s financial information, documents, and supporting evidence. The objective is to ensure the accuracy and completeness of the reported income and to address any potential discrepancies or irregularities. Typically, a questionnaire and a list of required documents accompany this notice, and individuals are expected to respond online. The scrutiny process continues until the income tax department is content that the individual has truthfully and satisfactorily addressed all their inquiries. The timeframe for the department to reach satisfaction is not explicitly defined. If the Income Tax Return (ITR) undergoes scrutiny, a notice under section 143(2) can be issued within three months from the conclusion of the financial year in which the return is filed.
In conclusion, salaried individuals may encounter various income tax notices, each serving a specific purpose in the tax assessment process. Notices such as those under Section 143(1) for intimation, Section 142(1) for inquiry, and Section 139(9) for defective ITR aim to ensure accurate reporting and compliance. Responding promptly to these notices, understanding the reasons behind them, and taking corrective action, if necessary, are crucial steps in navigating the tax assessment landscape. Staying informed about these common notices empowers individuals to manage their tax affairs responsibly and minimize potential issues with the income tax department.