On receiving the same, taxpayers would not be sure about what it is and how to respond to it. So, we will break it down here to help you understand these notices in detail.
But, before getting deeper it is important to know the difference between an intimation and a notice. While intimation highlights the outcome of the processing of ITR and taxpayers may nor may not be required to respond to it, notices are meant to be responded, according to Clear- tax and investing platform.
Intimation under section 143(1) of the Income Tax Act
This intimation informs taxpayers whether the income tax calculation in the ITR filed by them matches that of the tax department as per the records they have.
This is the preliminary assessment and is referred to as summary assessment without calling the taxpayer. At this stage, no detailed scrutiny is carried out.
So, this effectively means that the return has been processed.
It involves a prima facie verification and fixing the errors by the tax department in relation to tax calculation and tax payments to ascertain if any tax or interest is due or refund is due to the taxpayer.
There can be three types of intimation under this:
Intimation with no demand or refund: This type of intimation is sent if the department has accepted the return without making any adjustment.
Intimation with demand: This type of intimation is issued after making adjustments.
Intimation with a refund: This type of intimation is issued if excess income tax has been paid by the assessee either in the form of TDS, TCS, advance tax, self-assessment tax as compared to the tax determined in return of income.
Notice under section 142(1)
This kind of notice is issued to gather some information – if the tax return has been filed earlier or may be any documentary proof required against the claims made. This notice is issued before the assessment of the return.
Notice under Section 143(2)
The is sent by the department when the assessing officer (AO) is not satisfied with the documents or with the responses of the assessee against income tax notice u/s 142(1).
Notice under Section 148
When the taxpayer has not disclosed income correctly or has paid lower taxes, the assessing officer would serve a notice to the assessee asking him/her to furnish the return of income.
What should taxpayers do in case of receiving these intimation/notice?
Income tax refund: There can be many reasons for which I-T department can send a notice. If you get one, understand what is it and respond accordingly.