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Income Tax Notice – Top 7 reasons why you may get one

Notices from the Income Tax Department are very common these days due to their pepped up Tax compliance measures thru computerized/automated rules. While Receiving IT Notice is not a fun for anyone, it may create some panic among the tax payers. The tax payers need to react within the specified time limit to address the queries from IT Department to clear notice and / or Tax dues, if any.


below are Top 7 reasons why a Tax Payer may get an Income Tax Notice from the Department

  1. Mismatch of Income between form 26AS and Income Tax Return

    2. If the Income declared in IT Return does not match with Form 26AS, then the ITD may serve the notice to the tax payer for arithmetical inaccuracies. The Tax Payer should submit either the revised return or submit the response to the query.


  2. Error in TDS Amount

    3. The TDS claimed in the Tax return should match with the Form 26AS. Otherwise, the ITD may serve the notice on the tax payer to correct the TDS amount.


  3. Discrepancy in Tax Returns

    4. If the Tax payer have forgotten to include any income like interest, commission income etc., or claimed deductions under wrong sections or the information provided by the tax payer is incorrect, then there is a chance of notice by the ITD. The Tax Payer needs to correct it immediately.


  4. Random Scrutiny

    5. The Income Tax Department is randomly selecting the IT returns to be scrutinized. The Tax payers needs to upload the required documents within the time allotted by the ITD.


  5. Reporting of High Value Transactions

    6. If the tax payer has deposits of more than 2 Lakhs in bank, mutual funds investments of more than 2 Lakhs, Sale or purchase of Property etc needs to be reported to Income Tax Department. If not reported, then there is a chance of notice from the Income Tax Department.


  6. Self-Assessment Tax Not Paid

    7. If the tax payer does not pay the Self-Assessment tax at the time of filing the return, then the ITD may serve a notice to the assessee requiring him to pay the tax.


  7. Dis-allowances / Defects in Income Tax Return

    8. Filing of Returns is not enough in some cases. Income Tax returns should be accompanied by some forms. Below are some examples of defects in Income Tax Returns

    1. Foreign Income – Form 67 should be submitted along with Income Tax Return
    2. Arrears – Form 10E should be submitted along with Income Tax return
    3. If the net profit from business / profession exceeds 1.2 lakhs, then Profit & Loss and Balance sheet should be filled. Otherwise the Income Tax return may be treated as defective.
While Tax department do send the the notices in an email and possibly intimated thru SMSs, often times these were ignored due to the plethora of emails we get on a day-to-day basis,Hence we recommends tax payers to visit ITD portal to see the notice yourself 

or Speak to us to get help.
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