What to do when you receive a notice from the tax department
Most of us manage to get through our days without ever having to deal with the Income-Tax Department. Sometimes the small business that you are running may not be that lucky. So what do you do when the long arm of the tax department reaches out and hands you a notice?
Our advice – do not panic and do not ignore it. Find out exactly why the notice was sent to you and then carefully handle it or else you may end up paying a hefty penalty in addition to your tax payments.
Remember, receiving a notice does not mean you have committed a crime. Often notices are sent for relatively innocuous reasons like a minor error in filing a tax return or an enquiry for basic information. In such cases, submitting the requested information is enough. If the reason is not so innocuous, and the notice demands a scrutiny assessment, this means you will need to prepare yourself for a more detailed examination.
Five things to do when you receive a notice
1. Record the date and time of receipt of notice
– Ensure that you record the time and date of receipt of the notice either on the notice itself or somewhere else so that later on you are able to defend yourself and substantiate that you replied to the notice on time. This is important because the time limit by which the reply needs to be filed is mentioned on the notice and usually starts from the date of se ..
2. Check to whom it was issued
– Was the notice meant for you or for someone with a similar name? The Tax authority issues notices based on your PAN followed by name and address. Whenever you receive a notice, check all the details of whom it has been issued, PAN, name, address, etc.
3. Check the validity and details of the Issuer
– Check the validity of the notice, there are certain notices which can be issued within prescribed time or else they lose their validity. So, check the relevant section under which notice has been issued and check the time limit of the same. Also ensure that it is a genuine notice by checking details of the issuer, whether it is stamped and signed or digitally signed, the designation, office address etc.
4. Identify the reason behind issuance of notice
– It is good practice to identify the reason behind the issuance of the notice before submitting any response. It could be a minor error or a major issue. Based on the reasons identified, you can plan your next steps and decide on what and how to file your response before the tax authority.5. Submit your response on time
– Now that you have identified why you received the notice and have understood exa…………….Read More>>