WHY YOU GET IT NOTICES
A. It returns has not filed or delayed
- Your employer deducted tax from your salary.
- Mismatch in tax credit
- TDS in your Form 16 may be different from the actual tax credit mentioned in Form 26 AS
B. What if you made
- Capital gains
- Selling stocks/bonds
- Interest on fixed deposits
- Rental income, but did not mention in your return
If are liable to pay wealth tax if the net aggregate value of these things exceeds Rs.30 lakh.
1. Unproductive assets such as urban land, vacant house, personal car, gold, expensive watches, paintings, etc.
2. Any high-value transactions with or without quoting pan
- Cash deposits worth Rs 10 lakh or more in a year
- Credit card purchases of Rs 2 lakh or more
- Mutual fund investments of Rs 2 lakh or more,
- Purchase of bonds and debentures worth Rs 5 lakh or more in a year.
- Sale or purchase of property worth Rs 30 lakh or more also attracts attention of the tax department.
3. Investing in the name of
- Children or
Even if the investments are in someone else's name, they have to be mentioned in your tax return because of the income clubbing provision in the income tax act.
As per section 64 of the income tax act, any income from investment made or asset purchased in the name of close relatives (spouse, minor child or daughter-in-law) is clubbed with the income of the person making the investment and taxed accordingly.
This applies to all types of investments
- Fixed deposits,
- Land, building,
- Post office savings and
- Mutual funds.
Procedure to deal with it notices
- Respond to the notice, and furnish the relevant documents and information or
- File a rectified return and pay the tax due, if any, within the stipulated period.
- May required you to be present in person for checking returns filed. In that case either represent your case yourself or authorize a ca to do so
- Usually 30 days are given for reply by post or in person.
- Also attach a copy of documents regarding income and investments claimed in the return.
- Please consult a ca in case of complexities
Penalty for non-compliance: Income tax department can levy a penalty of Rs 5,000.
Penalty is not mandatory, and depends upon the discretion of the assessing officer.
- If any tax is due, 1% interest charged per month on the tax due from the due date.
- Concealment of income or non-payment of tax, the penalty can be 100-300% of the amount due
Conclusion: Not responding to the notice could cost you a lot of time, money and peace of mind. In some cases, it could also lead to imprisonment.
References: Business today
The author is a CA Final student and is Tax Professional and can be reached at email@example.com
The views expressed in this article are strictly personal. The content of this document are solely for informational purpose. It doesn’t constitute professional advice or recommendation. The Author does not accept any liabilities for any loss or damage of any kind arising out of information in this article and for any actions taken in reliance thereon.
Tags :Income Tax