A tax notice is an official communication issued by the tax authorities, such as the Income Tax Department. If an error is found in your filed Income Tax Return (ITR) in India, the Income Tax Department can send you an income tax notice. The notice is typically issued to request additional information, clarification, or corrections related to the errors or discrepancies identified in your tax return.It's important to respond to such notices promptly and take the necessary steps to rectify the errors or provide the requested information to ensure compliance with tax laws and regulations. Ignoring these notices can lead to penalties and legal actions by the tax authorities.
1. Notice under Section 143(1): This notice is issued to taxpayers who have failed to file an income tax return. The notice provides a 15-day window for the taxpayer to file the return.
2. Notice under Section 143(2): This notice is issued to taxpayers whose income tax returns have been selected for scrutiny. It specifies the areas of the return that will be scrutinized and requests additional information or documentation from the taxpayer.
3. Notice under Section 148: This notice is issued to taxpayers who have understated their income or overstated their deductions in their income tax return. It allows the taxpayer to explain the discrepancy and settle the additional tax liability.
4. Show Cause Notice: This notice is issued to taxpayers suspected of tax evasion. It outlines specific allegations against the taxpayer and requests them to demonstrate why they should not be penalized.
Common reasons for Tax Notice are :
1. Assessment Notices: These notices review and assess income tax returns and may request additional information.
2. Outstanding Tax Liabilities: These notices inform taxpayers of unpaid taxes, specify amounts owed, and provide instructions for settlement.
3. Tax Refund Notices: These notices notify eligible taxpayers about tax refunds and provide instructions for claiming them.
4. TDS Notices: They address TDS discrepancies, non-filing, or outstanding payments.
5. PAN Verification: These notices request verification or updates of PAN details, which are crucial for various financial transactions.
6. Filing Deadline Reminders: These notices serve as reminders for tax filing deadlines and provide updates on tax laws.
7. Assessment Orders: Assessment orders detail the outcomes of tax assessments, including any tax liabilities
How to Authenticate a Notice/Order Issued by ITD:
Before responding to any communication received in the name of the Income Tax Department, it's crucial to verify the authenticity of the notice or order issued by the tax authority. You can authenticate the notice/order/letter issued by the Income Tax Department on the e-filing portal. Here's how:
Step 1: Go to the Income Tax e-filing portal at www.incometax.gov.in. On the home page, find 'Authenticate notice/order issued by ITD' under 'Quick Links'.
Step 2: You can authenticate using one of the following methods:
Step 3: If you select to authenticate by PAN, document type, assessment year, issue date, and mobile number, choose this option and enter all the required details.
Step 4: After filling in all the details, you will receive an OTP. Enter the OTP received. Once the OTP is validated, the DIN of the notice issued along with the date of issue of the notice will be displayed.
If the notice is not issued by the ITD, it will display a message – 'No record found for the given criteria'.
Step 3(1): An alternative is to authenticate using DIN and mobile number.
Step 3(2): Enter DIN and mobile number and continue. You will receive an OTP. Validate using OTP.
If the notice/oder is issued by the Income Tax authority, it will display a success message. Otherwise, it will show – 'No record found for the given Document Number'.
Note: Never respond to any tax notice without first authenticating it. There are many fraudulent emails and letters that are sent out in the name of the ITD, and it is important to be vigilant to protect yourself from identity theft and financial losses.
Tax notices in India can be complex and stressful, but you don't have to go through it alone. Ecfile can help you understand and respond to tax notices quickly and accurately, so you can avoid penalties and get back to focusing on your business.Here are some of the ways we can help:
We have a team of experienced tax professionals who are experts in dealing with tax notices. We understand the complex tax laws and procedures in India, and we can help you navigate the system to get the best possible outcome.
If you have received a tax notice, don't hesitate to contact us for help. We are here to support you every step of the way.