ITR filing: Key types of income tax notices and how to deal with them
- August 3, 2023
- CA Chandan Agarwal's Office
Once ITR is submitted, the tax department checks the declarations and taxes paid to see if all these details match. If the taxes paid are found to be less than what the taxpayers owe or if the department finds out an error, they may issue an intimation/notice.
Income tax return (ITR) filing is important to get back the refund of excess taxes paid in a financial year. The deadline for filing ITR for financial year 2022-23 recently ended on July 31, 2023. Once ITR is submitted, the tax department checks the declarations and taxes paid to see if all these details match. If the taxes paid are found to be less than what the taxpayers owe or if the department finds out an error, they may issue an intimation/notice.
Here are some of the important kind of notices/intimation that taxpayers may receive:
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?
In case of receiving the notice, the taxpayer should check the reason for receiving it and the details of return filed by the assessee and computation contained in the intimation letter, experts say.
The taxpayer needs to review the details and the computation and respond accordingly. The time limit for responding to the intimation letter is 30 days from the date of receiving the intimation letter by the taxpayer. Although, if the taxpayer fails to respond to the intimation letter, then the return is processed by the income tax department after making necessary adjustments u/s 143(1)(a) and without providing further opportunities.
Source: https://www.cnbctv18.com/personal-finance/itr-filing-types-of-income-tax-notices-and-how-to-deal-respond-intimations-refund-17409311.htm
