Understanding Income Tax Notices

A taxpayer comes under a lot of stress as and when he gets to know that he has received an income tax notice. But instead of getting afraid of it, one needs to understand about it. It is quite possible that you receive a notice from the income tax department for old dues. The most important thing is to understand the reason for receiving the notice and replying to it timely in an appropriate manner because non-compliance with the notice or failure to produce the required documents could lead to a penalty of Rs.10000 along with tax and penal interest.

How is an Income tax notice received?

The intimation under particular section is sent by the income tax department on the email address provided in filing income tax returns online. If returns are processed by CPC, the sender will be intimations@cpc.gov.in. It will also be sent through post at the address associated with PAN number.

What to do when an Income tax notice is received?

It is very important to note that the notice received from the Income tax department shall never be ignored. On receipt of notice, you need to check your personal details carefully on the income tax notice i.e. name, address, PAN number etc. The PAN number needs to be verified cautiously because the department issues notices according to PAN, not name. If the income tax notice is received in electronic form, you are required to check Document Identification Number available on each communication with tax department.

After the personal details being verified, check the details of the sending officer i.e. name, designation, office address, signature, stamp, income tax ward & circle mentioned in the notice received from the Income tax department.Then after you need to understand why you have received the notice.

An Income tax notice is an important communication received from the tax department therefore, you need to keep it safely with you by making copies of it or saving it in a soft copy. Also keep its envelope as it contains the Speed Post number which can tell you when the notice was posted to you. It can be helpful if you receive the notice late and fail to respond with in the valid period.

After getting all the above things done, it is the time to respond to the notice so make sure that the response is submitted within the stipulated time. Once you have collected all the required information to be submitted, send the information and documents if any, along with a covering letter to the Income tax department. Also keep copies of such information/documents for future reference.

It is important to note that-

Where the intimation is sent regarding matters such as TDS mismatch or deduction amount, you can respond on your own. In matters where notice is regarding scrutiny or re-assessment, it is advisable to take professional’s advice. He will make you understand the demand raised in the notice and help in preparing an appropriate response.