ALL INDIA ASSOCIATION OF CENTRAL EXCISE GAZETTED EXECUTIVE OFFICERS(AIACEGEO)(Recognised vide CBEC letter F.No. B. 12017/10/2012-Ad.IV A Dt. 25.02.13 )
(Disclaimer- The views expressed in the Blog post are purely for the consumption of members of AIACEGEO only and the data/facts contained therein should be first verified with authentic source, before using the same, by anyone).
Wednesday, 21 March 2018
7 Common Reasons Why You Get Income Tax Notices
1. Due to TDS
You may be slapped with a notice by the department if there is any mismatch in the amount of TDS which you have shown in your return and the actual TDS that has been deducted during the year. For example, In case, your employer forgot to file TDS return but the same amount is shown in your income tax return then there arises a situation of mismatch.
While filing your return always make sure that the amount in form 26-AS matches with the amount you show in your return.
2. Mismatch of information in the return filed by you
If you make a mistake while filing your income tax return then be prepared for a notice. Mistakes can vary from filing incomplete information, claiming deduction under the wrong section or missing out on any specific income ignored completely.
3. Random Scrutiny
The IT Department selects many returns randomly for scrutiny while processing the returns. Upon receiving these scrutiny notices, don’t panic and read the notice thoroughly and do the needful within the time stipulated in the notice.
4.Ignoring income received from the previous employer
In case you’re wondering that you can smartly deceive IT Department by not mentioning the income received from the previous employer, then you’re wrong. IT Department can easily find it out from your Form 26-AS as it contains all the details of TDS deducted by your employer during the year.So don’t think of indulging in these types of practices instead save your taxes by smart tax planning.
5. Not depositing the full amount of tax assessed before the due date
You’ll be served with a notice by the IT Department if you do not pay the full amount of tax payable before the due date specified by the IT Department. For example, if your tax liability is of Rs. 20,000 and you only pay Rs. 16,000 by the due date then be prepared to tackle a notice.
6. Income Tax Return not filed or filed after the due date
You can receive a notice from IT Department for not filing a return if you haven’t filed your return yet. The follow-up task is very simple, just check if you’re required by law to file the return, if yes then just file your return and your problem is solved but you might have to pay penalty and interest at the rate 1% per month.
7. High-Value Transactions
For all the high-value transactions that you enter into with some entity or individuals, you higher your chances of getting a notice from IT Department. Following transactions can be classified as high-value transactions:
Cash deposits in bank aggregating to Rs. 10 lacs or more.
Payment via credit card of Rs. 2 lacs or more.
Investment in mutual funds of Rs. 2 lacs or more.
Investment in debenture or bonds in a company of Rs. 5 lacs or more.
Investment in shares of a company of Rs. 1 lac or more.
Purchasing jewelry of Rs. 2 lacs or more.
Always make sure that you provide your PAN number while entering into such transactions to safeguard yourself.
Income Tax Dept. Advises: Say no to Cash Transactions
DO NOT ACCEPT cash of Rs. 2,00,000/- or more in aggregate from a single person in a day or for one or more transactions relating to one event or occasion.
DO NOT RECEIVE OR REPAY Rs. 20,000/- or more in cash for transfer of immovable Property.