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You need to check these items after receiving Income Tax Notice

As per income tax rules, the last date of issuing notice for the income tax department will be after the end of the financial year in which ITR was filed. Effective from April 1, 2021, the Income Tax Department has to send the intimation notice to the taxpayer within 9 months from the end of the financial year
in which ITR has been filed.

At the time of processing ITR, the tax department checks for any arithmetical errors, internal inconsistencies, tax and interest calculation and verifies tax payment made etc. Once the ITR is processed, the I-T department sends the intimation under section 143(1). However, do keep in mind that at the time of processing of ITR, the tax department makes a prima facie check. In the future, they can still send you an income tax notice under a different section asking for further information.

What's in an intimation notice?

The intimation notice will state one of the following things:

(A) Your income details, deductions claimed, and tax calculations match with the tax department's assessments and calculations.

(B) Additional tax demand notice: There may be a situation where you would have missed reporting a particular income in your income tax return or have wrongly claimed a deduction or calculated your tax incorrectly due to which there is additional tax payable by you.

(C) Income tax refund: In this situation, as per the income tax department's assessment you have paid additional taxes as compared to your actual tax liability. In such a case, income tax refund will be shown as due to you.

Password to open notice

The intimation notice is a password-protected file. To open the notice received by you, the password is your PAN in lower case and your date of birth. For in-stance, if your PAN number is AAAAA0000A and date of birth is 01-March-1990, then the password to open the document will be aaaaa000a01031990.

How to read intimation tax notice?

Once the notice is opened, the first thing you should check is whether your personal details such as name, address, PAN and so on are correct or not. Once these details are checked, the next step is to read and match the income tax computation given by you in your ITR with the department's computation.

The intimation notice shows a comparison in a table format of income reported by you in the ITR under each head (in one column) with the income under that head as computed by the income tax department (in another column). Both the columns are displayed side by side for ease of comparison. Along with income details, the intimation notice also shows the details of the tax-saving de-ductions that are claimed by you in your ITR.



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