Reasons for Income Tax notice
- notice from the income-tax office; one of the main reasons is high-value cash transactions. If you make high-value cash transactions, there is a high chance of getting a notice from the Income Tax Department. The cash-related made in banks, mutual and property registrations etc. Now, Income Tax Department has signed an agreement with all most all government departments to obtain the high-value financial records, to cross verify whether it has been disclosed in their personal tax filing or not.
Cash deposits in FD
Cash deposits in bank FD should not exceed INR 10 lakh. It is advised to a bank depositor making a cash deposit in a bank FD account that it must not exceed Rs. 10 lakh.Cash Deposits in savings bank
In a savings account, if you make cash deposits or withdraw more than INR 10 lakh during a financial year, the income tax department may serve an income tax notice. In current accounts, the cap is INR 50 lakh.”Payment of credit cards
payment of INR 1 lakh or more in cash against credit card should be reported by bank. Additionally, if payment of INR 10 lakh or higher is paid in a financial year to settle credit card, the payment must be disclosed to the tax department. You need to check that you don’t cross your credit card spending cap, since the tax authority keeps track of credit card transactions as your credit card details are linked with your PAN Card, In case you are using credit cards on any high-value transactions, make sure to disclose them on Form 26AS while filing your ITR to avoid getting an income tax notice.Purchase or sale of a property
The sub-registrar must have updated of any investment or sale of immovable property for an amount of INR 30 lakh or more to the income tax. In case, you are purchasing or selling property for more than INR 30 lakhs, then also you are on the Income-Tax Department’ radar. The Income Tax Department may examine whether the buyer has reported the income on his tax returnShares, mutual funds, debentures, and bonds related cash transactions
If you are an investor in mutual funds, stocks, debentures must ensure that cash transactions in these investments does exceed INR 10 lakh. In case any expense or transaction has been listed as a high-value transaction, verify the AIR section of your Form 26AS. Other reasons are: Delay or non-filing of Income-tax return Tds claimed is not matching with 26AS Error in the tax return filed Reporting abnormal income, deductions or refundHow to deal with a notice?
Here is a checklist of things to do when you get a notice. The receipt of notice through the post office helps to note down the date it has arrived. Hence preserve the notice to justify any delay of the submission. Check your PAN details: Maybe the notice was meant for someone with the same name. Check your PAN details. Make copies of notice: You can’t afford to lose the notice, so make photocopies or scan and store it on your computer. Check validity: A notice under Section 143(3) for scrutiny assessment has to be served within 6 months of the end of the financial year. If served later, it will be deemed invalid. Check sender’s details: A notice must have the name, designation, sign, stamp and official address of the sender with DIN number. Organize the documents: Some returns are picked up for scrutiny at random. Don’t panic, but compile all documents. Seek Team IN professional help: If it is just a simple demand notice for excess tax, you can handle it. If the matter is a little complicated, it is best to take a team with a professional’s help. You may be required to appear before the AO to explain any discrepancy in the return or make a clarification. A team in professional can help you to organize your response so that you can provide proper and specific clarifications.Types of notices
Under section 131(1A), the Income tax officer has reason to suspect that income has been concealed. U/s. 133A, For survey or scrutiny of accounts. U/s.142, For not filing an income tax return. U/s. 143(1), For adjustment or if an error or incorrect information is detected in the return filed U/s.143(2) For regular assessment after a detailed inquiry by Income-tax officer. U/s.148, For reassessment if income-tax officer believes some income has escaped assessment. U/s. 156, For dues (tax, interest, penalty, fine or any other sum) payable.How to avoid the notice?
Try to file the ITR on time or within the due date. Make reconciliation between actual income and reported in the 26as to avoid the discrepancy Report every income or loss including bank interest, even if there is any loss from share trading, it has to be reported in tax filing. Finally, if there is any clarification, take help from Team IN filings Team IN Filings Tax and Law Practitioners Team IN Filings is a Tax and Law firm having its office at Bengaluru specializing in Company Law, Income tax, Gst, Labor law, Export – Import, Trademark, Startup India etc. It is a professionally managed firm having a team of experienced Company Secretary, Chartered Accountant, Lawyer and Tax consultant to provide various services like Company Registration, Tax filing, Accounting, Trademark, Payroll, Audit, Roc filings, litigation and representation, transaction advisory & compliance, configuration of tax-efficient business model.Our Address #188, 1st Floor, BT Pura, Sahakarnagar, Bengaluru – 92 Tel: +91 7019 827 351
About Us
Team IN Filings is a Tax & Law house in Bengaluru specializing in company matters, income Tax Gst, Trademarks Startup India, etc.
Our expert company secretary, tax consultant, CA, and Trademark agent provide Taxation, Registration for Companies Accounts Audit, Legal compliance, etc.
