Got an I-T notice? Some key things to know

Got an I-T notice? Some key things to know

Received an income tax inquiry notice seeking additional details, or for not filing your returns? If you have, then make it a point to file your return, or furnish those additional details, as soon as you can.

This notice, issued under section 142(1), is used either when a taxpayer fails to file their tax return or when additional preliminary details are needed, such as regarding bank interest or gains/losses from property sales.

If a taxpayer fails to respond to the inquiry notice, the case will be taken up by the taxman for further, more detailed probe or a “complete scrutiny”, a Times of India report (by Lubna Kably) said on May 8.

This is one component of a thorough set of guidelines recently released by the Central Board of Direct Taxes regarding the mandatory selection of income tax returns for full scrutiny.

It also includes situations concerning the absence of registration or the cancellation of registration under different sections, like 12A/12AB, which pertain to the registration of charitable organizations for tax benefits eligibility.

Moreover, if there was an income addition to the taxpayer’s previous year’s returns due to a recurring issue, the returns will be selected for scrutiny based on specified monetary thresholds. The guidelines also outline the duties and obligations of both Income Tax officers and the National Faceless Assessment Centre.

There is no major change in the criteria for compulsory scrutiny compared to the present position, ToI’s report quoted Ketan Vajani, a chartered accountant, as saying.

“The guideline points out that all I-T returns filed during FY24, will have the outer time limit for issue of a notice by June 30, 2024. This is pursuant to the amendment carried out by Finance Act, 2021, which has reduced the time limit for service of notice under section 143(2) to three months from the end of the financial year in which the return is filed,” Vajani told ToI.

It may be noted here that a complete scrutiny, carried out in selective cases, is a method used to to make sure that the taxpayer has declared her income correctly in the I-T returns and has paid all the payable taxes.

For more news like this visit The Economic Times.