Income Tax Notice: How to Read the Section 143 (1) Income Tax Warning Notice


The tax return filing process (ITR) does not end at the verification stage. Once an individual has verified their tax return, the income tax department begins processing the tax return. After processing the RTI, the tax service sends a notice of formal notice.

This information notice is sent under Section 143 (1) of the Income Tax Act, 1961. The notice is sent on the registered e-mail identifier of the declarant by the tax service . In addition, an SMS will be sent to the registered cell phone number of the registrant, informing the individual that the information notice has been sent to the registered email ID.

Accountant Naveen Wadhwa, DGM, said: “The government has revised the deadline for issuing the notice of formal notice to three months from April 1, 2021. the year over which the tax return is provided. This would mean that for the RTI filed for the 2020-21 fiscal year, the last date of issue of the notice of formal notice is December 31, 2022. ”

It is important that an individual read this income tax notice. Indeed, this notice informs you if the calculation of the income tax that you indicated in your ITR corresponds to that of the tax service according to the information available to it.

When processing the ITR, the tax department checks for calculation errors, internal inconsistencies, the calculation of taxes and interest and verifies the payment of taxes made, etc. After the ITR is processed, the tax department sends the section 143 (1) indication. However, keep in mind that when processing the ITR, the tax department performs a prima facie check. In the future, they can always send you an income tax notice in a different section to request further information.

What to check in the section 143 (1) warning notice?

The notice of formal notice will state one of the following:

A) The details of your income, deductions claimed and tax calculations correspond to the assessments and calculations of the tax service: In this case, the notice will show that there is no additional tax payable by you. In addition, payable and refundable taxes will be shown as zero.

B) Additional notice of formal notice: There may be times when you failed to report a particular income on your tax return, or you mistakenly claimed a deduction or calculated your tax incorrectly due to which you have to pay additional tax. In such a situation, the tax service sends you its notice of assessment and will ask you to pay the amount of the additional tax.

C) Income tax refund: In this situation, according to the assessment of the income tax service, you paid additional taxes compared to your actual tax liability. In such a case, the income tax refund will be shown as owed to you.

How to read the notice of intimation

The Intimation Notice is a password protected file. To open the notice you received, the password is your lowercase PAN and your date of birth. For example, if your PAN number is AAAAA0000A and your date of birth is 01-April-1990, the password to open the document will be aaaaa000a01041990.

Once you have opened the password protected file, the first thing you need to check in the intimation notice is if your personal information like name, address, PAN, etc. are correct or not.

Once these details are verified, the next step is to read and match the income tax calculation you provided in your ITR with the department’s calculation. The information notice shows a tabular comparison of the income you declared in the ITRs under each heading (in one column) with the income under that heading calculated by the income tax service (in another column ). The two columns are displayed side by side for easy comparison.

In addition to the income details, the information notice also lists the details of the tax deductions you are claiming in your ITR. If the income and tax savings details in both columns match, your total income after deductions, that is, net taxable income, will also match.

The information notice will also state your tax details i.e. tax payable on net taxable income, tax relief (if applicable), interest under Articles 234A, 234B, 234C, late filing fees under section 234F and total income tax.

If there is an income mismatch under a particular title or if a deduction amount is wrongly claimed by you or there is some other arithmetic error, then in such a case there will be a discrepancy in the calculated taxable income. by the tax service and what you have deposited in your RTI. The taxable income calculated by the department can be higher or lower, which will either indicate that you have to pay additional tax or that you are owed a refund.

If a refund is due to you, it will also be reflected in the notice of formal notice. However, keep in mind that the tax department will not send you a text message to let you know. Therefore, don’t be afraid of text messages or emails stating that the tax refund is owed to you and that you are required to provide your bank details in order to receive it; it is a form of fraud to which many taxpayers have fallen prey.

If you are owed a tax refund, the tax department will automatically credit it to the bank account you designated when filing the ITR. The ministry will only notify you that your income tax refund has been processed without asking you for bank details.

What to do if the notice of formal notice is not received within the prescribed time limit

In the event that your return is not processed by the tax service or is received but you do not receive a formal notice, you can then file a complaint on the new income tax portal. .

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