Income tax returns (ITR) filing: Have you received I-T dept notice? Safeguard yourself; here is how

Income tax is a percentage that individuals or corporates pay to the government from their earnings. This income is categorized in different groups on the basis of the amount involved. Each group is categorised according to a specific tax slab. Income tax slab rates are revised during the Budget almost every year, with the government tinkering with it here and there. Various deductions are allowed to a taxpayer under Section 80C and Section 80D. However, Income Tax dept usually comes across some problems that get created by citizens either due to human error, their lazy behaviour or even criminal intent to hide their income. This ends up with them receiving a notice from Income Tax department. A few specific reasons why we receive income tax notice is due to not filing ITR, mismatch in tax rate, high value transactions and scrutiny notice. While dealing with income tax notices, you can get slapped with some penalties. To help you understand teh process and dig yourself out of trouble, we provide a list of income tax notices that an individual may receive. 

1. Notice under section 143(1) - Under this section an  intimation for ITR is processed by the income tax department and sent to the taxpayer. Usually it relates to arithmetical mistakes or changes to be done.

2. Notice under section 143(1)(a) - This notice is issued by Central Processing Centre (CPC) which seeks clarification from taxpayer in regards to mismatch between income and deduction when compared to Form 16, Form 16A or Form 26AS.

3. Notice under section 139 (9) - Under this, if an IT department officer comes across an error in your filing of return like the information given by a taxpayer and the amount of return filed. This notice gives only 15 days time to taxpayers in clearing the notice. 

4. Notice under section 154 - This notice usually acts as an rectification which contains details of return submitted by the assessee and the one computed by IT department. Sometimes, a taxpayer may feed in wrong information and takes credit of taxes, deductions, etc. A rectification is filed for errors in mismatch in tax credit (TDS), advance tax mismatch and deduction under Chapter VI A not allowed. 

5. Notice under section 245 - This one acts as an intimation for adjusting refund against demand. Usually IT authorities sent in this notice to taxpayers when they want to adjust outstanding tax demands from refund due. Such demand may concern to an earlier Assessment Year and when refund is claimed, same is adjusted against the demand.  

7. Notice under section 142(1) - Reason for this notice is to inquire all details of the assessee before making an assessment. It is issued in cases like where return has been filed, where it has not been filed and time specified to file such return has been expired. 

Considering the above, any income tax notice may stir panic among taxpayers. 

Archit Gupta, Founder & CEO ClearTax said, "Upon receiving an income tax notice, there is no need to panic, instead a taxpayer must thoroughly review it. If there has been an error in the return, the taxpayer may correct it and file a revised return."

Gupta adds, "One must carefully check the time allowed to respond to the notice. A reply must be drafted and sent within the time allowed. A notice may be responded to online on the income tax department website."

"If the taxpayer is unsure about the implications of the notice, he may seek professional help," said Gupta.