7 Reasons for Income Tax notices

Income Tax notices can be received due to number of reasons.In this article we will discuss common 7 Reasons for Income Tax notices.People as a responsible taxpayer always try to file ITR with utmost care.Following are the common 7 reasons for Income Tax notices.

7 Reasons for Income Tax notices.
7 Reasons for Income Tax notices.
7 Reasons for Income Tax notices
  • Mismatch with form 26AS:
    • 26AS shows details of Tax deducted,Name of deductor,type of Income and amount of Income.Hence if there is mismatch in the above reporting that can result in income tax notice.
  • Not filing Income Tax Returns:
    • When gross income without deduction is more than basic exemption limit it is required to file ITR.
    • Being resident Indian and if foreign property is held or a signing authority in a bank account held in foreign country ITR is required to be filed.
    • When TDS is deducted by tax deductor it is required to file ITR. 
  • Non frequent high value transaction:
    • Income like interest income,capital gains on share or property or deposits in bank and other such transaction are reported by share broker,banker and other few institutions in the annual information return.If this kind of transaction has occurred and are mistakenly left or ITR is not filed than this can result in Income Tax notice. Instances of such transactions are making payment using credit of Rs.2lakh,depositing more than Rs.10lakh in saving account,investing in FD for more than Rs.5lakh,investing more than Rs.2lakhs in mutual fund or buying shares valuing more than Rs.1lakh or investing in property for more than Rs.30lakh,etc. 
  • For not declaring investment made in the name of spouse:
    • IF investment is made in the name of spouse than income from it is required to be clubbed in the hands of investor failing which can result in issue of Income Tax notice.
  • Unreported income from previous employer
    • Income tax notice can result from non reporting of income from previous employer due to job change people may forget to report income of previous year to new employer and thus file incorrect return based only on form 16 from new employer or failing to declare income exempt from tax as income tax department can be aware only when exempt income is shown in ITR.
  • Non payment of full tax
    • If any tax,penalty or fees are due to income tax ,department may send you notice to adjust your dues against refund if any claimed by you or may ask you to pay tax.After recent amendments ITR can be filed even if tax is not paid.Hence it is important to verify full payment of tax before filing ITR and avoid this mistake.
  • Defective ITR :
    • Income Tax notice can result by filing incorrect ITR form or non filing of mandatory or filing incorrect information due to lack of knowledge or ignorance.

Owner of this information can be reached at K M GATECHA & CO LLP.


Important note: This does not lead to legal advice or legal opinion and is personal view and for information purpose only. It is prepared on  the basis of facts available and applicable law.It is suggested to go through applicable provisions of law,latest regulations,judicial announcements, circulars, notifications and clarifications  etc before taking any action based on above content.You agree here by that for any action taken on basis of above information in any manner writer or K M GATECHA & CO LLP is not responsible or liable for  any omission,reliability,accuracy,completeness,errors or authenticity.This work by professional is just for knowledge purpose and does not constitute any kind of  solicitation of work or advertisement.