Tax alert! Got a notice from Income-Tax dept? This is what you should do now
It may be quite alarming at the outset, but the first thought that should come to your mind after receiving a notice from the Income-Tax department is to keep calm. There is a common belief that any official document received from the I-T department should be a reason to worry and this makes the situation worse.
It may be quite alarming at the outset, but the first thought that should come to your mind after receiving a notice from the Income-Tax department is to keep calm. There is a common belief that any official document received from the I-T department should be a reason to worry and this makes the situation worse. It is important to understand that anyone can get a notice from the Income-Tax department due to several reasons. In fact, what you might mistake for a notice, could just be an intimation of some news or fact. Tax expert Sunil Garg told Zee Business TV that people are so scared of receiving a letter from the taxman that sometimes they don't even read the entire document or e-mail received.
"People get scared as soon as they get an email or notification from the Income Tax department. There are times when they don't even open and read it to find out if it is an intimation, a notice or a query," he said. Garg explained that in most cases, you get notices in form of intimation. "If you have filed the Income Tax, you will get an intimation asking for various things like the refund filed was right or not," he added.
Difference between Intimation and Notice
Garg explained that intimation is basically a form of information. "Earlier, it was sent in specific cases but has now been made mandatory. Every time a taxpayer files income tax, he or she gets the intimation from the department informing whether it has been approved or not. If there is a mismatch in the calculations, you are sent a demand along with the intimation," he said.
Whenever you get an intimation, check if you have received a demand or not. If you have, find out the reason behind it. The department also sends you a computation sheet which can help with this.
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When do you get a notice?
An income tax payer can get a notice by the I-T department in many cases. It is important to remember that these notices are generated automatically by the Income Tax Department’s software. So, there is a chance that you might get a notice even if everything is right. However, you are likely to get a notice in these cases -
- If you have filed the Income Tax Return but there was some error in the form
- If you have failed to file the Income Tax Return
- If the department thinks there is some discrepancy in the Income Tax return filed
- If the Income Tax department wants to review documentation based on which your returns were filed
How to react?
Garg said that the first thing you should check is under which section has the notice been sent. It will help you understand the reason why notice was sent in the first place itself. Usually, fines are imposed on assesses who do not respond to I-T notices. These can be as high as Rs 10,000. So, don't be ignorant towards these notices and contact your tax expert to solve the matter.