Filing income tax returns by due date is crucial, but equally important is to file these correctly. If you don’t do so, expect a notice from the Income Tax Department. What would you do if you get one? Firstly, don’t panic.
Next, understand the section under which you have received it and how you should respond to it. Here are some of the common sections under which people get notices and what these mean:
SECTION 139 (9)
You will get a notice under this section in case of defective filing of tax returns. The errors can include the following:
If you have used the wrong ITR form, if you haven’t paid the entire tax due, if you have claimed a refund for deducted tax but have not mentioned the relevant income, if there is a mismatch in the name on the form and PAN card, if you have paid taxes but not listed income.
Time limit to respond: Within 15 days from date of intimation by assessing officer. You can seek an extension by writing to the local assessing officer. If you don’t respond, the return will be considered invalid.
What to do? Go to the income tax filing site (//incometaxindiaefiling.gov. in/e-Filing/) and download the right ITR form under the given Assessment Year. Then select the option ‘In response to a notice under Section 139(9) where the original return filed was a defective return.’ Fill in the reference number and acknowledgement number, and fill the form by including the required rectification. Under ‘e-File’, select ‘e-File in response to notice u/s 139(9)’ and upload the rectified XML using the password in the notice.
SECTION 143 (1)
More than a notice, this is an intimation about the returns filed by you. You can get three types of notices under this section:
a) It can be simply the final assessment of your returns as your tax calculation matches that of the assessing officer.
b) It can serve as a refund notice, where the assessing officer’s computation shows excessive tax paid by you.
c) It can be a demand notice, wherein assessing officer finds a shortfall in your tax payment.
Time limit to respond:If tax is due, you will have to pay it within 30 days.
What to do:If there is no discrepancy in the returns, you don’t have to worry. If a refund is due, it will be transferred in the bank account. If it is not, request a reissue of the refund. If tax is due, you will have to pay it within 30 days.
SECTION 143 (1A)
“Though this provision existed earlier, the computer-assisted notices are being sent to a large number of taxpayers only this year,” says Chetan Chandak, Head of Tax Research, H&R Block, India. This is essentially a communication on proposed adjustment, which means that if there is a discrepancy in the income mentioned in the return and Form 16, or deductions given under Section 80C or Chapter VIA and Form 26AS, then verification will be sought.
Time limit to respond: Within 30 days of issue of intimation (applicable from the AY 2017-18).
What to do: You will have to log in to the tax filing portal and, under the ‘e-Proceeding’ section, explain the discrepancy, besides uploading the supporting documentary proof.
SECTION 143 (2)
This is a scrutiny assessment notice that follows preliminary assessment of returns. “This can be of three types, with the first two coming under computer-assisted scrutiny selection (CASS), while the third is a manual scrutiny notice,” says Chandak.
a) Limited purpose scrutiny: This is not a full-fledged scrutiny and is meant to highlight only one or two points.
b) Complete scrutiny: This entails a complete, detailed scrutiny as serious discrepancies have been identified in the returns.
c) Manual scrutiny: This notice is hand-picked by the assessment officer, but it can be sent only after an approval by the Income Tax Commissioner.
Time limit to respond: The taxpayer will have to appear in person or through a representative before the officer on the date specified in the notice.
What to do: Get all the documents and proofs to support your case and do not miss the hearing. If you fail to comply with the provisions of this section:
a) It may result in ‘best judgment assessment’, which means the officer decides the tax liability as he sees fit.
b) Penalty of Rs 10,000 for each failure or;
c) Prosecution up to one year with or without fine.
SECTION 234 (F)
This is a new section that has been introduced in the Income Tax Act, according to which a fee or penalty will be levied in case returns are not filed by 31 July of the relevant assessment year.
“So far, salaried taxpayers were lax about not filing returns by 31 July if taxes had been paid, but now it is mandatory to do so,” says Amit Maheshwari, Partner, Ashok Maheshwary & Associates. Till date, a penalty of Rs 5,000 was levied at the discretion of the assessment officer if the return was not filed.
Starting with assessment year 2018-19, a fee of Rs 5,000 will be charged in case returns are filed after the due date but before December 31 of the relevant assessment year or Rs 10,000 if it is filed after December 31 of the relevant assessment year.
However, for those earning less than Rs 5 lakh a year, maximum penalty of Rs 1,000 will be levied.