General Reasons Which Pressure Dept to Send I-T Notice

Under the provisions, the Income Tax Department can issue many notices to taxpayers. However, it has certain conditions. In general, the department sends notices to taxpayers for a variety of reasons, including missing or delaying Income tax return filing, incorrect filing, claiming an income tax refund, and others.The notice can be generated under the sections 143(1), 142(1), 139(1), 143(2), u/s 156, Section 245, and Section 148.

Nobody likes or expects to get a notice from the Income Tax Department. These can be issued for so many reasons and errors committed from your side. Here are the top reasons that may cause you to deal with the Income Tax Department's notice.

TDS Payment Mismatch

If your TDS claimed in the Tax return is not as per Form 26AS and 16 or 16A, you will be issued a notice by the department.

Mismatch B/W ITR and Form 26A

If there is any difference found between the income tax return and form 26A, the department will issue a notice. So make sure you state the income accurately while filing your ITR.

Differences in Income Tax Returns

Sometimes you can commit some common mistakes that are often done by many taxpayers, such as claiming deductions under the wrong sections or failing to add their interest, rent, dividend, or other incomes in their statements. Such mistakes cause differences between the tax returns they pay and what they are liable to pay. It ends up with a notice from the department.

Differences in Revealing Declared and Actual Revenue

Taxpayers try their hardest to evade the taxes, but the Income Tax Department is very conscious of this as well. If the officials find any discrepancy in your revealed income and your actual earnings from various sources, they will serve you notice.

No Proper Reporting of High-Value Transactions

It is necessary to show all your high-value transactions in the report to let the Income Tax Department curb black money and track the money that is not reported. Transactions above Rs. 10 lacs, whether in cash deposits or withdrawals, are considered high-value transactions. The limit for high-value transactions is over Rs. 10 lacs for international transactions in foreign currency, the purchase of mutual funds, bonds, or debentures.

Random Scrutiny

The Income Tax Department is extremely active in finding out tax evaders. Every year, the department conducts a scrutinising process where they randomly select some files and go through their IT returns. If they find any discrepancy in the files, they will prepare notices for the files bearing errors. If you have everything clear on your side and have paid your taxes accordingly, you are on the safe side.

Missing Documentation

Your income tax returns need to be equipped with all the essential documents, such as a balance sheet and statement of profit and loss if you obtained a net profit of more than Rs. 1.2 lacs from your business or profession, Form 67 is also required in the case of any foreign income you have received, and Form 10E in case of arrears.

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