Income-Tax Returns: Here are some common reasons you may receive a tax notice from I-T dept — Top FAQs answered

Filing your income-tax returns (ITR) have become more accessible over the past few years with the full process available online via the Income-Tax (I-T) website. However, there are a lot of things that can be confusing for first-time taxpayers. Today we look at the various reasons you could receive an I-T notice.

What is an Income-Tax notice?

This is an official communication from the I-T department regarding unreported income, mismatch or discrepancies in your filing, non-filing of returns, verification of claims, missing information or overdue filing, and demand for outstanding income tax among other reasons. Notably, taxpayers can get such notices before and after filing their returns.

The notice will most likely come to your linked email address. You can check the section mentioned in the email to understand what area of concern the particular notice is referring to.

• Inquiry before assessment is under Section 142(1) of the I-T Act.
• Intimation letter is sent under Section 143(1) of the ITA.
• Notice for scrutiny of assessment is received under Section 143(2) of the ITA.
• Notice for escaping assessment is sent under Section 148 of the ITA.
• Demand notice is sent under Section 245 of the ITA.

What are common reasons for I-T notice?

The following are most common reasons you may receive an I-T notice:

• Non-filing of ITR
• Use of incorrect ITR form when filing your returns
• Misreported or incorrect TDS amount in ITR
• Inaccuracies in your ITR
• Failure to declare any income during the fiscal / assessment year in ITR.
• Random assessment of ITR filing by an officer
• Oversight in submission of relevant papers with ITR
• Non-disclosure or misreporting of capital gains during the fiscal / assessment year in ITR.
• Failure to correctly report investments for self, spouse or children.
• Non-disclosure of high-value transactions during the fiscal / assessment year in ITR.

What is total taxable income?

Your total taxable income is calculated as the gross earnings from salary and other sources (bank fixed deposits and shares, etc.), minus any tax-saving deductions you may have made. Such deductions include investment in public provident fund (PPF), national pension scheme (NPS), insurance, or payments towards loans and rent.

Should I opt for old regime or new regime?

The answer to the new vs. old tax regime debate depends completely on how much you earn and what deductible investments you can show. You can use online tax calculators to determine which option minimises your tax liability or consult with a financial planner or your chartered accountant (CA), for the best course of action.

What documents do I need to file ITR?

Before filing your ITR keep the following documents ready as applicable: Form 16 (from current employer and former employer if you changed jobs mid-year), PAN Card, Aadhaar Card (PAN-Aadhaar must be linked), and investment proofs (including bank deposits, PPF deposits, etc.), home loan interest certificate, and insurance premium payment receipts.

Which ITR form should you choose?

• Choose ITR-1 form: If you are an individual with income from salary, one house property, and other sources.
• Choose ITR-2 form: If you are an individual or Hindu Undivided Family (HUF) without business income.
• Choose ITR-3 form: If you are an individual or HUF with income from business or profession.
• Choose ITR-4 form: If you have presumptive income from business or profession.

Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.