Documents required to reply the IT Notices

Introduction

The Income Tax Notice alerts taxpayers to problems with their tax bills. Reasons for notification include errors in submissions, assessments or requests for information. Instantly respond to required documents like Form 16, TDS certificates, bank statements and financial details. Verify the authenticity of the notification on the e-filing portal. Review notification details, resolve discrepancies, and respond within the specified time frame. Use the checklist provided to ensure timely and accurate responses and avoid penalties.

What is Income Tax Notice?

An income tax notice is a written communication sent by the Income Tax Department to a taxpayer alerting an issue with his tax account. The notice can be sent for different reasons like filing/ non-filing their income tax return, making the assessment, asking for certain details, etc. When the Income Tax Department sends a notice, the taxpayer has to act on the notice within the given timeline and resolve the matter with the tax authorities.

An income tax notice may be issued for the following reasons –

• When no ITR has been filed.

• Errors or discrepancies in the returns filed.

• A mismatch between the TDS values and income tax returns is accessible through the Income Tax Department’s Form 26AS records.

• The assessing officer can ask for specific documents required for IT notice or information from the taxpayer through an income tax notice.

• For other reasons as the assessing officer might deem fit.

Documents Required for IT Notice Reply

Here is a list of the documents required for every income tax notice reply depends on the type of notice received. Basic documents required for IT notice that are common to every notice are:

• Copy of Income Tax Notice

• Proof of Source of Income such as Form 16

• Certificate of TDS

• Copy of Bank Statements

• Copy of last 3 year Financials , Audit Report

• Copy of Proof of Investments

• Copy of Form 26 AS

• Copy of GST Returns, if GST Rgistration is there

• Details of Fixed Assets if any

How To Authenticate Notice/Order Issued By ITD?  

Prior to the taxpayer providing any response to correspondence purportedly from the income tax department, it is crucial to authenticate whether the notice/order issued is authentic and issued by the income tax authority.

Taxpayer can authenticate the notice/order/letter issued by the income tax authority on the e-filing portal. Let us understand to verify the same.

1. 1. Go to income tax e-filing portal. On the home page, go to ‘Authenticate notice/order issued by ITD’ under ‘Quick Links’.

1. 1. Taxpayer can authenticate using:
      • PAN, document type, assessment year, issue date and mobile number (for notice/order/letter issued for AY 2011-12 and subsequent years only)Document
      • Identification Number and mobile number (for all assessment years)

1. If taxpayer wants to authenticate by PAN, document type, assessment year, issue date and mobile number, select the option and enter all the details.
2. After filling in all the details, taxpayer will receive an OTP. Enter the OTP received. Once the OTP is validated, the DIN of the notice issued, along with the date of issue of the notice, will be displayed. If the notice is not issued by the ITD, it will display a message – No record found for the given criteria.
3.  Another alternative is to authenticate using DIN and mobile number.
4. Enter DIN and mobile number and continue. Taxpayer will receive an OTP. Validate using OTP.

What Should Be Done After Receiving An Income Tax Notice?  

When a taxpayer gets a notice from Income Tax department, he should take the following steps:

1. Carefully read the notice to determine why it was sent.
2. Examine the notice’s basic details to determine that it is intended for him. To ensure that the notice is sent to him, it should include his correct name, PAN number, address, and so on. Check the assessment year given in the notice as well.
3.  Determine the mismatch in his income tax return that resulted in a notice being served, if any.
4. To avoid penalties and prosecutions, respond to the notice within the time frame specified.
5. Ensure that his response is backed by adequate information.
6.  Also, make sure to check that the notice he received is reflected in your income tax account online.

Checklist for Income Tax Notice  

Step 1: After the intimation notice under Section 143 (1) is received of the Income Tax Act,1961 the taxpayer has to make a reply within 30 days from the date when the notice is served.

Step 2: If the taxpayer fails to respond within the time that is prescribed then the Income Tax Returns will be processed with the necessary adjustments without providing any opportunity to taxpayers.

Step 3: Once the notice is received then the taxpayer should cross-check the name, address, and PAN number, mentioned in the notice.

Step 4: Similarly, it is necessary to cross-check the assessment year that is mentioned and verify the e filing acknowledgment number.

Step 5: Revised returns can be filed only when the taxpayer has made mistake in the original ITR filing. When the taxpayer has opted to revise the return it has to be filed within 15 days.

Step 6: The rectification return can be filed only when the taxpayer has found any fault or error in the order that is sent by the Income Tax Department.

Step 7: If the intimation notice demands the taxpayers to pay an additional tax amount i.e demand notice then it has to be treated as the notice of demand u/s 156.

Step 8: On receiving this notice of the demand the taxpayer has to respond within 30 days to avoid the !% of the interest per month from the 30 days expiry period and a penalty is also imposed by the assessing officer.

Conclusion

To sum up, handling income tax notices necessitates close observation and prompt action. It is important to comprehend the purpose of notices and the paperwork required to reply. Prior to replying, notices must be legitimately verified through the e-filing system. To avoid penalties, taxpayers should carefully analyze the information provided, evaluate any inconsistencies with their returns, and reply within the allotted period after getting a warning. To ensure compliance and prevent unfavorable outcomes, it is imperative to adhere to a checklist when replying to letters issued under Section 143(1) of the Income Tax Act. Taxpayers may effectively settle disputes with tax authorities and uphold their financial integrity by being well-informed and proactive.