Filed incorrect ITR? You may soon get Income Tax notice; here is why

Updated: August 9, 2017 7:14 AM

Every year, July to November are the months when people (including individuals, firm or a company) are required to file their income tax return for the last financial year, which ended on March 31.

Income Tax, ITRThe income tax department expects and requires that every taxpayer shall furnish true and correct information relating to his income, assets and liabilities.

Every year, July to November are the months when people (including individuals, firm or a company) are required to file their income tax return for the last financial year, which ended on March 31.

In the tax returns, I-T department not only requires details of income earned during the year, but also assets and liabilities of taxpayers (including foreign assets and liabilities), depending on level of and type of income earned by the taxpayers.

While a salaried person, not having other sources of income, is generally not required to furnish many details, taxpayers having other sources of income and having significant assets are required to report such assets and liabilities as well.

Fill returns with correct information

The income tax department expects and requires that every taxpayer shall furnish true and correct information relating to his income, assets and liabilities. For this purpose the department also obtains a verification/ declaration at the end of the tax return from every taxpayer that information submitted by the taxpayer is true and correct.

It is also important to note that while many taxpayers file their tax returns with the help of chartered accountants and finance professionals, the primary responsibility of true and correct information remains with the concerned taxpayer only. It is therefore very important for a taxpayer to verify the information filled in his tax return himself, and ask questions from the chartered accountant/ advisor, in case he is unable to understand any particular aspect/ information.

Verification of information submitted

Like taxpayers are required to file their tax returns, their employers, customers (from whom they receive payment, etc.,) are also required to file TDS return in respect of TDS deducted from payments made by such employers/ customers.
Similarly, banks, mutual fund companies, registrar of properties and any many other specified persons are required to reports their transactions with various persons/ taxpayers in an Annual Information Return. Even in case of cash transactions, which were traditionally out of the tax net, if the value of such cash transaction exceeds `200,000, concerned seller/ service provider who receives payment in cash is required to report details of such transactions with customer details to income tax department in prescribed format.

Notice from I-T department

If the information by a taxpayer in the tax return does not match with information provided by other corresponding parties, then the tax department will send a notice. With online database of all such information in place and use of information technology, statistical tools and data matrices, I-T department has started cross-verification of information reported by a taxpayer with respect to income and other transactions.

So, if amount of salary income reported by a taxpayer does not match with TDS Certificate/ Form 16 issued by its employer, it may receive a notice seeking explanation of difference. Or, in case of any property sale/ purchase transaction, I-T department may issue notice to concerned seller/ purchasers seeking details of transaction in case the same does not match with information provided in tax return.

Revision of returns for errors

In case of any un-intended error/ omission, a taxpayer can review and revise the tax return before end of March 31 of relevant Assessment Year (i.e. tax returns for Financial Year 2016-17 can be revised on/ before March 31, 2018).

In case a taxpayer has not reviewed its tax return in detail, it may be a good time to do it, ask necessary queries and clarifications from his advisor/ chartered accountant and revise tax return, if required. Further, even if the I-T department issues any notice, such inadvertent error can be explained with reason, if any.

Shailesh Kumar is director, direct taxation, Nangia & Co LLP

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