Here are 10 most common reasons for Income Tax Notices :

1. For delay filing IT return : If you have not filed your return by the deadline, you will receive a reminder notice from the income tax department.

2. Misreporting LTCG from equity : You need to report any realised longterm capital gains (LTCG) on listed equity and equityrelated mutual funds at the time of filing ITR. LTCG above Rs 1 lakh in a year on listed equity and equityrelated mutual funds on which STT has been paid will be taxed at 10 percent.

3. For TDS claimed not matching with Form 26AS : While filing ITR, the TDS should ideally have to be the same in Form 26AS and Form 16 or 16A. However, there can be several reasons why some details may mismatch. Notices for TDS mismatch are issued under section 143(1). The reason for getting this notice is a mismatch in the TDS reported by the deductor to the revenue authorities and the TDS claimed in the return of income by the assessee.

4. For nondisclosure of income : Revenue authorities obtain information about income of assesses from different sources like banks, employers, tenants, mutual exchange of information between countries etc. If you have not shown some income in your ITR, then you may get a notice from the income tax department if they detect the nonreportage. Notice is issued under section 139(9) or 143(1) for nondisclosure of income.

5. For not declaring investments made in the name of spouse : At times, it may happen that you would have made investments in the name of your spouse but have not shown the income from those investments in your return. In such a scenario, any income from such investments can be taxable in your hands and you have to declare it at the time of filing returns. For instance, as per the income tax law, if an asset is acquired in the name of the spouse through the income of the taxpayer.

6. For filing defective return : If you do not file the income tax return in the correct form, you will receive a defective return notice from the income tax department. You get a defective return notice under section 139(9) of the Income Tax Act. Once received, you need to respond to it within 15 days from the date of receiving the notice. In a scenario like this, if you have incorrectly filed your ITR, you may need to file a revised ITR. You must try filing the revised ITR before the deadline ends

7. If you have done highvalue transactions : You may receive a notice if you have done highvalue transactions. The income tax department identifies taxpayers who have made highvalue transactions in any financial year but not yet filed an income tax return. The department can ask you to mention the source of funds for making such highvalue transactions. For instance, if you made large transactions through your credit card, made huge financial investments, or bought a property in a particular year, etc. In such a scenario, the income tax department can send you a notice asking you to reply stating valid reasons or file income tax return within 21 days.

8. If your return is picked for scrutiny : You may anytime come under the taxman's lens. The department can randomly scrutinise returns to enforce tax compliance. Therefore, if you receive any notice specifically under section 143(2), it means your return filed is in under scrutiny by your Assessing Officer. The scrutiny can be related to mismatches or inaccurate reporting, return filed and all related documents, or it can be based on predefined criteria issued every year by the Income Tax Department.

9. For setting off refunds against remaining tax payable : If you have claimed a refund on the tax paid but there are still some previous tax dues payable by you, the Assessing Officer (A.O) may send you a notice. The A.O will give an intimation in writing to such taxpayer of the action proposed to be taken regarding the refund claimed. The A.O can ask for the pending demands from the previous years to be adjusted with the refund amount.

10. For tax evasion in earlier years : The Income Tax Act gives the IT department power to reassess previously filed IT returns. Mohan said that under section 147 of the Income Tax Act, the department can issue a notice to the taxpayer. An Assessing Officer can pick tax returns for reassessment based on certain predefined criteria. Notice for reassessment is sent only when tax officer has reasons to believe that income which was chargeable to tax has escaped assessment.

Video on High Value Transactions :    • 13 High value transactions watched by...  

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