The income tax notice is an intimation sent by the Income Tax Department under section 143(1) which is sent after the returns are filed by the taxpayers and have been processed by CPC. The taxpayers need to give a response to this legal document and cannot ignore it anyhow, it is issued to seek information about potential errors or inconsistencies in the ITR filed by the taxpayer along with some additional documents that are needed to be mailed to the IT Department.
Central Board of Direct Taxes has made strict regulations and guidelines for banks or cooperative banks to confirm and report deposits of a heavy wealth of ₹10 lakhs or more during a financial year through several accounts. The Income Tax Notice for Cash Deposits is a legal document that should be responded to in due time. You must log in to your Income Tax account then mail a response irrespective of the transactions made or not.
Visit the Income Tax Department Website and log into the online filing account through the help of this link, https://incometaxindiaefiling.gov.in.
Some high-value transactions in cash cause an income tax notice to reach your doorstep from the Income Tax Department. There are several genres of transactions in cash kept under close inspection like mutual fund houses, brokerages, banks, and registrar of properties. All these mentioned entities shall be answerable and inform the Tax Department if such kind of scenario comes to the surface. Resolving Mismatches with Returns
In some scenarios the receipts under the band income from house property or income from other sources mentioned in Forms 16A, Form 16, and Form 26AS can be highlighted in different ITR heads, in those scenarios, an Income Tax Notice will not be issued with context to the discrepancies between the two. In some cases, some genres of income can be taxable only in a specific band income from other sources, in those situations there can be a mismatch at the gross level and there will be people who will receive an income tax notice for mismatch in income with form 26AS.
There can be situations when you can receive an income tax notice at your doorstep, do not panic and respond to it carefully, below are some walkthroughs about how to reply to the income tax notice through an online portal comfortably.
STEP 1: Visit the website https://eportal.incometax.gov.in/iec/foservices/#/login Log in with your credentials and click the table-proceeding, the received notice will show up on the next page.
STEP 2: Next you should click the link, Proceeding Name to see the details. As the next webpage fill in, write, and mail your response by clicking on the Submit Link below the Response Tab.
STEP 3: Once you click on the submit link the next page will give the details of the variance between the returns filed and the Forms 16 Form 16A or Form26AS.
STEP 4: The next job will be a sensitive one, you should check and analyze the reason for the disparity between the return filed and the respective Form mentioned there. Select if you agree, disagree with addition, or partially agree. If you have a positive response then you should file a revised ITR.
STEP 5: If you disagree with the addition, then you should provide a strong reason related to such disagreement along with providing a specific elaboration of the reasons for the wrong disclosure from the list mentioned and forward your response.
Tax Experts opine that taxpayers should be observant when it comes to notifying the Income Tax Department, they should have a sound knowledge about the income tax notice for high-value transactions. The Tax Department is now notably strict and vigilant about matters concerning bulk transactions through several accounts. The 6 categories relating to heavy value transactions are listed below.
Cash Deposit in FD- The CBDT or Central Board of Direct Taxes have declared that banks should be accountable and report if a person deposits in one or more than one time deposits of amounts more than ₹10 lakhs in a financial year.
Credit Card Bills and their payment- Credit card dues aggregating to 1 lakh or more with their payments done by cash must be reported to the officials concerning the norms of CBDT. Dues that are paid off by a payment of 10 lakh or more through any mode of payment must be reported to the Income Tax Department without hesitation.
Cash Deposits in bank accounts- The CBDT declared the mandatory responsibility of banks to be accountable for reporting transactions of 10 lakh or more in cash through a financial year from more than one account.
Property Transactions- The registrar of properties has to inform the department if an immovable property is bought or sold by a person amounting to 30 lakhs or more in a financial year.
Purchasing shares, mutual funds, debentures, and bonds- The institutions issuing bonds, debentures, or shares must report to the IT Department if the transaction receipt of a customer aggregates to a total of 10 lakhs or more for acquiring bonds, debentures, or shares in a financial year. A specific limit has been set for the purchase and sale of shares, mutual funds, and debentures or bonds.
Purchasing foreign exchange- Acquiring Foreign Exchange of tourists which is inclusive of tourist cheque, forex cards, debit or credit cards amounting to 10 lakhs or more must be reported to the Tax Department.
There will most probably be an income tax notice in your mail if the above scenarios come into play. If this Income Tax intimidation is not responded to before time, it may cause the returns to be considered invalid. The time to respond if an income tax notice reaches you is under 15 days from the date of intimation sent by the IT Department. Sometimes an extension for the response date can be managed by the Tax Officials. Talk to our experts