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Income Tax notices that you must know about | How to Reply and Deal with it

Income Tax notices that you must know about.

income tax notices facts 11

  • Getting a mail from the Income Tax (I-T) department can be a little scary.
  • I still remember my first notice, waiting for the message to download was sheer agony, the fear was reminiscent of the dreaded college result declaration day.
  • The subject line of the mail started with, “Intimation U/S 143(1)…”
  • Income tax notices emails from the I-T do not always signal trouble.
  • It could be just confirming, “Hey, we’ve processed your tax return. Everything looks fine”.
  • Or it can be to inform you that the assessing officer (AO) is adjusting your refund against a tax due, probably from the past.

Let’s take a look at the most common Income Tax notices:

1.Income tax Notice under section 143 (1): Intimation of assessment

This is the most common type of I-T notices. It could mean one of the following:

  1. Your returns filed match with the computation by the AO. In this case, this is an intimation notice to be considered as the final assessment. This is the notice, you should hope to receive!
  2. You’ve been too good and paid extra taxes. Voila, your refund is on the way!
  3. It’s a demand notice for more tax.
  • If you receive an intimation of the third type then it becomes a Notice under section 156, you must pay the dues within 30 days.
  • There probably are taxes, penalties, fines or any other sum to be paid based on an order passed.
  • Such a sum will be mentioned in the Notice u/s 156.
  • If you believe the demand is wrong, then you have to prove it to the AO.
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2. Income tax Notice under section 139 (9): Defective return:

  • If you’ve got a notice under this section, then your returns have been deemed defective.
  • What’s a defective return? That’s an ITR in which something is missing or incorrect.
  • Perhaps you’ve filed a wrong ITR, or some entries don’t tally, or name doesn’t match with PAN or the return is incomplete.
  • Whatever the defect is, it is described along with a suggested solution.
  • On getting this notice you have 15 days to respond, either to file a revised return or to write back saying you disagree a the reasons why. Failure to respond will lead to making the return invalid.


3. Income tax Notice under section 142 (1): Preliminary inquiry:

  • When a return has not been filed, you may get this notice asking to do so, in order to make the assessment.
  • This notice may be sent to those taxpayers too who have filed their returns on time, but the AO requires some documents or accounts to begin your assessment.
  • If you happen to get this notice, be sure to comply with all the document requirements.
  • Non-compliance can lead to penalties, prosecution with imprisonment and possibly fines, or a Best judgment assessment under section 144.
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4. Income tax Notice under section 245 : Adjusting refund against tax payable

  • In order to intimate you that the refund amount due to you is being set off against a pending tax amount, the IT department sends this notice.
  • The tax demand can be from the same year or previous years.
  • Either a part of the refund due to you will be adjusted against the tax amount or the full refund.
  • In case after adjustment, some tax is still left to be paid, you get this notice a demand notice.

5. Income tax Notice under section 148 : Income that has escaped assessment

  • Unfortunately, this notice is akin to the tax department digging up something you thought was long dead and buried.
  • A notice under the section 148 calls for either assessment or reassessment of your income or a part of it, which the AO now thinks went un-assessed earlier.
  • Reasons for getting this notice include your tax having been computed at a lower rate, excessive deductions or exemptions claimed, or when more loss has been computed than allowed.
  • You’d be expected to file returns for the relevant year, furnish details of income or pay the taxes due.
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No matter what notice you may receive from the taxman, the key is to stay calm, read it properly and check if it actually applies to you. You may hire the service of a CA to help deal with it but make sure you keep a basic idea of the what’s and why’s of the proceedings.

How to REPLY Income Tax NOTICE

Also Read:

Check out latest Income Tax Rates : Download Tax return form

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