Received Income Tax Notice? Things to Keep in Mind Before Responding to an Income Tax Notice

The Income Tax Department is responsible for collecting income tax and implementing tax laws, along with tracking individuals’ Income. If a person does not file an ITR or submits incorrect information in an ITR, the Income Tax Department issues a tax notice to such a person. There has been a rise in the number of tax notices sent to taxpayers in recent months.

The main reason behind this increasing number is that the Income Tax Department is now keeping a much closer watch on whether taxpayers are following the laws or not.

The most common reason why the individual gets a tax notice is giving incorrect information in the ITR. As there are four types of ITR, individuals filing ITR for the first time get confused and submit the wrong ITR. Taxpayers often get stressed and anxious on receiving a tax notice. Individuals should not panic in such a situation but should take the right steps to respond to the notice. Here is how to respond to it.

How to Respond to Income Tax Notice

Review the Notice

On the e-filing portal of the Income Tax Department, verify the authenticity of the notice under the “pending Actions” option. verifying the notice is important, as there are many phishing scams going on.

Check for the section under which the notice has been received

Notices are issued under various Sections, and it is important to respond to the notice based on the section under which it has been issued. If the income tax department is not satisfied with your reply notice, you might face issues.

Respond by the Given Date

The notices issued by the Income Tax Department include a date by which the taxpayer is required to respond. If you do not respond by the given deadline, you can end up being penalized by the tax authority. Therefore, it becomes important for the taxpayers to reply to the notice on time. It also indicates that the person is complying with the tax laws. The Income Tax department generally gives 30 days to reply to a tax notice.

Correct your ITR Mistakes

If there is a mismatch or error in the information in the ITR, you can correct it by filing a revised return or rectifying the error. Such as, a notice received under Section 139(9) can be resolved by filing a defective return and rectifying the mistakes within 15 days.

Paying Additional Tax

If the notice asks you to pay extra taxes because of discrepancies, calculate the amount of tax along with any other interest and pay it on time. It is not important to file a revised return in such cases. You can simply view the amount you are liable to pay in the dashboard of the e-filing portal under the pending actions tab.