Monday, July 18, 2016

7 Types of Income Tax Notice [How to Answer Income Tax Noice]

By - Here are most common types of Income Tax Notice you may receive and ways to answer them. Most of person start panicking as they receive Income Tax Notice. So, here we  are guiding you what type of income tax notice you may receive, purpose of income tax notice and how to answer notice of income tax department.

7 Types of Income Tax Notice [How to Answer Income Tax Noice]

Income Tax Notice
First of all, don't panic at all, none of the notice for IT department are made to harass you. It might happen that you forgot to file your ITR form, or to submit TDS form or of any other reason. Its just a notice, don't worry, here we are guiding you how to deal with such notices. There are 7 most common IT section which under which IT department sent notice to you. Take a look one by one and learn about them;

1. Section 131 (1A)

IT notice with Section 131 (1A) has been sent to person from IT dept after Assessing Officer (AO) suspects any concealing of income. If AO officer thinks that you have black money (secret money) or you about hide any income, they may sent you section 131 (1A) notice to you and they may start investigation in this matter.

There is no time limit to answer this notice. Anyways, if IT department found any black money in your account, they may proceed with investigation, Anyhow.

2. Section 142 (1)

You may receive section 142 (1) notice if you haven't submitted your income tax return form within time limit. If your Assessing officer found that you are late in submitting ITR form, or you have not submitted any important documents, or you have not submitted due account statement for your income, you may receive section 142 (1) income tax notice.

You may receive this notice after assessment year end, your time limit to reply will be mentioned in notice. In fact, its not notice, its just a information letter about missing things in your ITR. Don't panic, answer it easily.

3. Section 143 (1)

If you have paid right amount of tax, or if you have paid more tax than income or if you have paid less amount of tax, you may receive Section 143 (1) IT notice from Assessing Officer (AO). Below is what to do and how to reply for any of such notice;

- Informing :- If you have paid right amount of tax and your amount matches with AO's calculation, you may receive intimation notice.

- Demand :- In case you have paid less amount tax than AO's calculation, you may get demand notice to pay more tax or you can explain about your tax calculation. If AO satisfy with your answer, you may not be assessed.

- Refund :- You can get income tax refund if you have paid more tax than actual income.

You need to answer with in one year of the time you receive section 143 (1) IT notice.

4. Section 143 (2)

This is just follow up notice of section 142 (1) notice. if your Assessing Officer (AO) is not satisfied your section 142 (1) notice reply, he/she may sought more documents via section 143 (2) notice. you need to answer this notice with in 6 months of start of financial year.

5. Section 148

If your Assessing Officer (AO) founds that you have escaped some amount of income which is not reflecting in your ITR form. AO may demand more information on this. If your income tax amount is less than 1 lac, you have time to answer them in 4 years while if your income tax is more than 1 lac, you need to answer section 148 in 6 months of time.

6. Section 156

Its a demand notice to pay penalty or fine for late payment of income tax. Tax payer has paid less or late payment are served notice under section 156. Most of the tax payer who comes under this notice may receive notice with in 30 days.

7. Section 245

In case you demand tax refund from income tax department for current assessment year and there is some amount due in your account for previous assessment year and Assessing Officer (AO) just adjust the amounts of two assessment year. You may get adjustment of income tax via section 245 notice. you don't need to reply to this notice, in case you found you have no due left and IT dept wrongly adjusted amount, you can contact IT dept anytime soon.

Update :- Income Tax Department has sent 7 Lakh IT notice to recover money from Black money holder and tax defaulters. [Source]

These are the most common notice tax payers receive, and we have explained their purpose and how to answer them. if you have any more question, you can ask us in below comment box. Thank you.


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