The income tax department issues notices when it has doubts about income or expenses declared by the taxpayer. Unless you have misreported your income or assets or made wrong claims, you need not worry. Mint gives you a rundown on when you may get a notice.

What happens after you file your return?

Once you file your income tax return (ITR), it is processed by the income tax department. The department first examines the return of income for its correctness, a process called assessment. At first, a preliminary assessment under Section 143(1) of the Income Tax Act, 1961, is done, wherein the department checks for arithmetical error, incorrect claim and so on. The department has to complete the assessment under Section 143(1) within a year from the end of the fiscal in which the return of income is filed. At this stage, no detailed scrutiny of the return of income of a taxpayer is carried out.

What are the most common tax notices?

Based on the preliminary assessment, routine notices are sent regarding mistakes you might have made while filing the ITR. Often you don’t have to respond to the notices: mostly, it’s intimation that the ITR has been processed. If the department has made any adjustment in return that you don’t agree with, you can respond within 30 days. If the department doesn’t receive a response, it will consider the ITR as acceptable. Notices under Section 143(1) for errors and omissions are the most common, but taxpayers may get notices for not disclosing certain income or due to adjustment of pending tax dues against refund.

What’s the reason behind this year’s scrutiny notices?

In the first phase, about 58,000 taxpayers, who filed their ITR for FY18, were served scrutiny notices. In the last few years, there has been a spike in the declaration of foreign incomes and assets. This could be a reason why more scrutiny notices have been issued in cases where tax filers have declared foreign assets and incomes.

When do you get a tax notice for scrutiny?

Scrutiny is of two types—limited and detailed. If the department needs more information, it sends limited scrutiny notices. Detailed scrutiny notices are sent to check the correctness of claims and deductions made in the ITR. Notices are sent within six months from the end of the fiscal in which the return is filed. A case can be opened afresh within six years from the end of the assessment year. If the return included foreign income and assets, notices can be issued up to 16 years from the end of the relevant year.

How should you reply to a scrutiny notice?

Under the “e-proceeding" facility, tax officers have to take recourse to electronic communication for all scrutiny notices. For each tax notice, a particular response procedure has to be followed. Once you get a notice, access your income tax account under “My Account", click on “My Pending Actions" tab or on “Worklist" and go to “For your action" to see if any demands or arrears are pending. You must submit the information needed within the time mentioned in the notice. A delay can have a bearing on your refunds, if any.

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