To avoid penalties from the income tax department, it is essential to respond to the income tax notification promptly and provide all the necessary documents.
Additionally, filing your income tax returns (ITR) within the deadline is mandatory.
It is important to note that if your earnings in a fiscal year fall within the taxable income bracket, you are obligated to file an ITR.
Taxpayers who miss the tax filing deadline will receive notifications from the income tax department.
However, in some situations, individuals may still receive income tax notifications even if they have already submitted their ITR well before the deadline.
Typically, receiving an income tax notification does not imply that you have committed an offense.
Nevertheless, it is crucial to respond promptly to the notification and provide the necessary documents and information to the department.
The income tax agency may send a notice to examine certain aspects of your ITR.
Such notices are usually sent when there are disparities between the income reported and actual income, failure to report high-value transactions, insufficient documentation, and delayed or non-filing of returns.
Additionally, if you claim excessive deductions, you may also receive a notice.
Potential causes for getting a notice from the income tax department
Discrepancies between your stated and real income
The income tax department remains vigilant against individuals who attempt to evade taxes.
If there is any inconsistency between the income you report and your actual income, you may be subject to receiving a notice.
Failure to submit high-value transactions
Not disclosing high-value transactions in your ITR can trigger an investigation by tax officials.
High-value transactions may include significant cash deposits, real estate purchases, or luxury item acquisitions.
To combat the use of undisclosed income, the income tax agency requires taxpayers to disclose all high-value transactions to identify any unreported income.
Incomplete documentation
In the event that you do not attach all the necessary documents while filing your ITR, you may receive a notice from tax authorities.
It is advisable to provide all the required supporting documents for the deductions you claim and your total income from all sources in a fiscal year to avoid such notices.
Late or non-filing of ITR
If you miss the tax filing deadline or fail to file your tax returns altogether, it is highly likely that you will receive a notice from the income tax department.
Random scrutiny
The income tax department randomly selects files for tax return reviews. If you have paid your taxes correctly and within the deadline, you have nothing to be concerned about.
Excessive deductions
If you claim an excessive amount of deductions, the income tax department may send you a notice for further examination.
