Income Tax Notice: 90% people do not know, you can get these 5 reasons too

News India Live, Digital Desk: Have you ever received income tax notice? If yes, there is no need to panic. Often people think that getting notice means something wrong, but this does not always happen. However, it is important that you take it seriously and understand why it has come. According to an estimate, 90% of people do not know why they can get income tax notice.

The Income Tax Department can send notices for several reasons. Some notices are just to seek information, while some indicate a mistake or mismatch. Come, let us know 5 common reasons why you can get notices from the Income Tax Department:

1. High-Value Transactions:
When you do large transactions, such as depositing heavy cash in a savings account, making big purchases with credit cards, or buying or selling any property (house, land), banks and other financial institutions directly inform the Income Tax Department. This is called ‘Statement of Financial Transaction – SFT). If these transactions are not shown properly in your ITR, you may get notice.

2. Mismatch in ITR in Income Tax Return (ITR):
Many times, the information you give while filing income tax returns (ITR), and the information that the Income Tax Department already exists (eg your TDS or TCS data), there is a difference. For example, if your Form 26AS or AIS information about income or TDS does not match your ITR, then this department can ask for clarification when it is mismatched.

3. Not filing or delaying income tax returns (Non-Filing/Late Filing of ITR):
This is the most direct reason. If you do not file your Income Tax Return (ITR) within the prescribed time frame, or do too late, the Income Tax Department can send you notice. Many times, if the department feels that your income is taxable but you have not filled ITR, then notice can also come.

4. Not disclosing all income sources):
If you do not disclose all your sources of income, such as income from rent, interest on bank deposits, profit from selling share (capital gains), or any other additional income, you can also get notice. The department gets your income information through many means, and if this information does not match your ITR, explanation can be sought.

5. Claiming excess deeductions/exemptions:
The Income Tax Act allows you to take advantage of some deductions and exemptions (such as investment under Section 80C, HRA, etc.). But, if you claim deduction from the limit without proper proof or the limit, then the Income Tax Department can ask you for its verification.

What to do if you get income tax notice?

• Do not panic: Stay calm first.

• Read notice carefully: Understand what the notice is about and what information has been requested.

• Get the required documents: Prepare all the documents related to the information and proof sought in the notice.

• Answer on time: It is very important to respond within the time limit given in the notice.

• Take the help of expert: If you do not understand the notice or you are uncertain how to respond, it is best to seek the help of a chartered accountant (CA) or tax advisor.

Remember, it is very important to follow the Income Tax Rules and present your financial information correctly. If you get a notice, do not ignore it and take appropriate action at the right time.

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