Why Are Salaried People Getting Notices?

There can be many reasons salaried individuals may receive an income tax notice:

• Income Doesn’t Match Records: If the income reported by the taxpayer is not matching with the details from the employer, bank or other sources may send notice.
• Income Not Declared: If someone forgets to mention income from rent, bank interest, side jobs, or freelancing, they may receive a notice for not providing information properly.
• Wrong Deductions: If a person claims tax benefits like rent or medical deductions without proper proof or submits fake documents like fraudulent rent receipts, then a notice could be issued.
• Big Financial Deals: if you are making large cash deposits, buying or selling property or making big investments then this can attract the tax department’s attention.

• Mismatch in Tax Statement: If the income reported in the return is not matching the official tax record (known as Form 26AS) the individual can receive a notice.
• Late or Missed Filing: Not filing the return on time or forgetting to file can also lead to a notice.
• Random Checking: The tax department reviews return randomly to make sure accuracy.
• Foreign Assets Not Reported: If someone has income or property outside India and fails to report it, a notice may also be issued.
• Unreported Gifts or Loans: Not providing all information of high-value gifts or loans in their return can also result in getting a notice.
• Ignoring Earlier Notices: If you are ignoring previous notices or not properly addressing it then stricter notices will be sent.

Tax experts are available to help individuals understand and respond to such notices correctly.

Common Types of Notices Sent

Here are some common notices that salaried employees may receive:

• Notice under Sec (143(1)): This indicates whether a person owes tax or is due for a refund after their return is reviewed.
• Notice under Sec (142(1)): This is sent if the tax department needs additional details or if someone has not filed their return.
• Notice under Sec (148): This is issued when the department discovers that some income went unreported and more tax must be paid.

• Notice under Sec (139(9)): This is given when there are errors in the return. The person can correct and resend the return within 15 days.
• Notice under Sec (143(2)): This is sent when the department wants to examine the return in detail.
• Notice under Sec (156): If tax, fines, or penalties are due, this notice requests payment within 30 days.
• Notice under Sec (245): This is sent when the department wants to adjust tax dues from earlier years with the current year’s refund.

Handling These Notices

If a person receives an income tax notice then they should follow this procedure:

• Read the Notice Carefully: Understand what the notice is about and what is the purpose of it.
• Collect All Documents: Collect income-related papers, salary slips, Form 16, bank statements and investment proofs.
• Follow the Deadline: Always answer before the last date mentioned in the notice.

• Attach Adequate Proofs: Attach all the supporting evidence along with your response that would help them in easy verification.
• Expert Advice: When you are not able to understand the notice properly, reach out to a tax lawyer or a professional.
• Track Your Submission: Check the portal of submission to make sure that your reply was submitted and received, if done online.
• Follow up: Keep on checking if you receive any further communications or updates from the income tax department.

Fake Deductions

Lately, the department has taken a stricter stand against salaried employees claiming wrong deductions.

While legitimate tax-saving options such as HRA, LTA (Leave Travel Allowance) and housing loan interest exist sone people are still misusing these by submitting fake documents. The department is now using advanced computer tools and artificial intelligence to catch such cases.

Employees planning to claim HRA or LTA must ensure their documents are real. The AI system can easily detect fake documents, and strict actions are being taken against those who are caught.

How to avoid getting a Notice

Here are some ways for people with salaries to protect themselves from income tax notices:

• Submit Your Returns on Schedule: Make sure to file your returns before the cut-off date. If you’re behind, do it as you can.
• Review Form 26AS: This form provides a tax overview related to your PAN. Make sure your return lines up with this form.
• Store Records: Hold onto copies of income proof, investment papers and receipts. This helps during audits.

• Disclose All Earnings: Don’t forget to include extra income like interest, rent money or side earnings.
• Claim Deductions: Ask for tax breaks if you have the right paperwork to back them up.
• Answer Notices: If you get a notice, don’t put it aside. Respond as they tell you without delay.
• Consult an Expert: If taxes confuse you, get help from a tax advisor or specialist.

As the tax department are getting strict salaried workers need to be more truthful while submitting their tax forms. Following to these basic guidelines and staying alert can help avoid problems and makes the process easy.