Introduction:
Receiving an income tax notice can be unnerving, especially if you’ve already filed your returns on time. Understanding the intricacies of these notices is crucial for a timely and appropriate response. In this guide, we’ll delve into the types of income tax notices, how to authenticate them, and what steps to take when you receive one.
How to Authenticate Notice/Order Issued by ITD
Before responding to any communication from the income tax department, it’s imperative to verify the authenticity of the notice or order. The Centralized Communication Scheme (CCS) introduced by the Central Board of Direct Taxes (CBDT) ensures that every communication bears a unique Document Identification Number (DIN) from October 1, 2019.
Steps to Authenticate:
- Visit the Income Tax e-filing portal at www.incometax.gov.in.
- Navigate to ‘Authenticate notice/order issued by ITD’ under ‘Quick Links.’
- Authenticate using either PAN, document type, assessment year, issue date, and mobile number or Document Identification Number and mobile number.
- Upon selecting the authentication method, fill in the necessary details.
- Receive and enter the One-Time Password (OTP) to validate.
- If valid, the DIN and issue date of the notice will be displayed; otherwise, a message indicating no record found.
Types of Notices/Intimations
1. Intimation Under Section 143(1)
After filing your returns, the Central Processing Centre (CPC) electronically processes them, issuing an intimation under section 143(1). This communication informs about tax liability, refunds, or changes in losses. Respond within a year if a tax demand is present.
2. Notice Under Section 143(2)
This notice signals that your return has been chosen for scrutiny. You must respond within six months after the relevant assessment year.
3. Notice Under Section 148
Issued when the assessing officer believes there’s income escaping assessment. The timelines for issuing notices vary based on the case and financial year.
4. Notice Under Section 245
If tax hasn’t been paid for previous years, this notice allows setting off the current year’s refund against the demand. Respond within 30 days.
5. Notice Under Section 142(1)
Issued for additional information or to prompt filing if a return hasn’t been submitted. Non-compliance may result in penalties or prosecution.
What to Do After Receiving an Income Tax Notice
- Careful Review: Read the notice thoroughly to understand the reason behind it.
- Check Details: Ensure your name, PAN number, address, and assessment year are correct.
- Identify Mismatch: Identify any discrepancies in your income tax return that led to the notice.
- Timely Response: Respond within the specified timeframe to avoid penalties and prosecutions.
- Provide Adequate Information: Ensure your response is backed by sufficient and accurate information.
- Verify Online: Confirm that the notice is reflected in your online income tax account.
Common Causes of Notices
- TDS Inconsistency
- Inaccurate Tax Return
- Missing Documents Submission
- Failure to File Returns
- Non-disclosure of Investments
- Undisclosed High-Value Transactions
- Random Scrutiny
- Improper Disclosure of Capital Gains
- Undeclared Income
- Incorrect Use of Return Forms
Conclusion:
In conclusion, adeptly handling income tax notices is integral to financial responsibility. By adhering to the outlined steps, you navigate the intricate landscape of notices, authenticate them, and respond promptly. This proactive approach safeguards your financial interests. Understanding the nuances of each notice type, from Section 143(1) intimations to Section 148 reassessments, empowers you to take informed actions. Timely responses, verification of details, and compliance with the unique Document Identification Number (DIN) ensure a smooth process. Embracing these practices not only resolves potential discrepancies but also fosters a sense of financial control and responsibility in the face of regulatory engagements.
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FAQs
Why Authenticate Notices/Orders?
To verify authenticity with the unique Document Identification Number (DIN) assigned to each communication from the Income Tax Department.
What if Notice/Order Lacks DIN?
Consider it invalid and non-existent. No action is required.
Where to Authenticate Orders?
Utilize the “Authenticate Notice/Order Issued by ITD” service on the e-filing portal.
Is Login Necessary for Authentication?
No, you can authenticate without logging in.
Mobile Number for Authentication?
Any accessible mobile number can be used; it doesn’t have to be the one registered on the e-filing portal.
What is DIN?
Document Identification Number, a unique 20-digit number assigned to every communication from the Income Tax Authority.
