THE day Abhishek got a promotion at his workplace was also the day he received an email from the income tax department with the subject mrked ‘IDS 2016’. Abhishek was petrified. Words like undisclosed income, penalty and prosecution scared him and he wondered what he had done to catch the attention of the income tax department. Most of us would react in a similar way on finding a mail from the IT department.
Such communications, however, should not be a reason to panic. With the government trying to expand the tax base and reduce tax evasion, there seems to be an increase in communications from income tax authorities. The informative email Abhishek received was sent out to make people aware of the Income Declaration Scheme (IDS) introduced by the government. There are other such general communications/ reminders which are sent by the tax department from time to time.
For instance, acknowledgement of the signed ITRV received by the Central Processing Centre (CPC), reminders to file your tax returns/pay advance tax, etc.
Another set would include intimations/notices in relation to the income-tax returns filed. There is the intimation under Section 143(1) to inform you that your income-tax return has been processed by the CPC. These may highlight any arithmetical error or any incorrect claim which is apparent from the information provided by you in your income-tax return. Notice issued under Section 245 of the Act informs you that the refund due to you for a certain year has been adjusted against the demand outstanding for another year.
The scrutiny notices that read ‘Notice under Section 143(2)’ are the ones that can give you the shivers. Such notices generally summon you to meet the tax officer on a certain date with a list of
With the introduction of e-assessments, it is now possible to have the assessment carried out via email which does not require any physical meetings with the tax officer. While the traditional method of conducting the detailed scrutiny continues, we now see limited scrutiny notices wherein only selected aspects in your income-tax returns
Even in cases where you receive scrutiny notices, there is no reason to get flustered. The process should be fairly simple if all your documents are in order. In case there are any complexities, you may reach out to your tax consultant for assistance who will be able to respond to the notices on your behalf.
The writer is tax partner, People Advisory Services, EY India.
Views expressed are personal