income tax
The Income Tax Department regularly issues various notices, letters, and orders to individual taxpayers for compliance and assessment purposes. In December 2024, data revealed that for the Financial Year (FY) 2023-24, 8.13 crore Income-tax Returns (ITRs) were filed, including revised returns, of which 7.63 crore originated from individual taxpayers. This significant volume highlights the importance of understanding the types of communications taxpayers may encounter.
Intimation under Section 143(1)
This intimation follows the processing of ITRs, determining if there is a tax refund, tax payable, or no demand/no refund. The Income Tax Department compares details of income sources, deductions, exemptions, and tax claims. According to Section 143, this intimation must be sent within nine months from the end of the financial year in which the return is filed.
Defective Return Notice under Section 139(9)
This notice informs taxpayers of defects in their returns, offering a 15-day window to rectify these issues. If rectification is not made, the ITR will be deemed invalid. Common causes for such notices include discrepancies between the total receipts in Form 26AS and amounts reported in the ITR.
Adjustment of Demand Notice under Section 245
Section 245 allows the issuance of a notice for adjusting tax demands against refunds due. Taxpayers must respond within 30 days, either accepting the demand or providing reasons for disagreement.
Rectification Order under Section 154
Taxpayers can file a rectification request for apparent mistakes in the intimation under Section 143(1). Requests can be submitted online or to the Assessing Officer within four years of the order. The Income Tax Department must respond within six months of receiving the application.
Response for Refund Confirmation
The Income Tax Department may issue an email regarding the refund claimed in the ITR. Taxpayers have 30 days to confirm or revise the claim, utilizing the Income-tax portal for this communication.
Issue Letter
Typically issued by the jurisdictional Assessing Officer, these letters request supporting documents or submissions specific to outstanding tax demands.
Scrutiny Assessment Notice under Section 143(2)
A notice may be served if the Assessing Officer requires further evidence supporting the taxpayer's return. Such scrutiny can either be limited to specific issues or comprehensive.
Inquiry before Assessment Notice under Section 142(1)
This notice requests further details from the taxpayer to substantiate claims made in the ITR. It may require various documents to support the reported income, deductions, or exemptions.
Assessment Order under Section 143(3)
Following submissions made in response to notices under Sections 142(1) and 143(2), the Assessing Officer will assess the total income or loss and determine tax payable or refunds. An assessment can be ordered within 12 months from the end of the assessment year.
General or Special Order under Section 119(2)
The Central Board of Direct Taxes (CBDT) may authorize reliefs for exemptions or deductions beyond specified time limits under certain circumstances.
Best Judgment Assessment under Section 144
This applies when taxpayers do not file required returns or do not comply with notices. The Assessing Officer makes an assessment to the best of their judgment after allowing the taxpayer the opportunity to respond.
Summons under Section 131
Tax authorities may issue summons to gather information or compel attendance for examination. This focuses on inquiries regarding potential concealed income.
Power to Call for Information under Section 133
Authorities may compel various entities, including banks, to provide financial information deemed necessary for assessments.
Notice under Section 148 for Income Escaping Assessment
A notice will be served to those suspected of income not declared in their assessment. Time limits are defined by the duration since the relevant assessment year.
Notice of Demand under Section 156
When taxes or other amounts are owed, this notice specifies the payable sum due to orders under the Income Tax Act.
Communication of Proposed Adjustment under Section 143(1)(a)
These adjustments address errors or incorrect claims in the return. Taxpayers must be notified before such amendments are applied.
Each type of notice, letter, or order issued by the Income Tax Department serves a specific purpose in ensuring compliance and accurate assessment. Taxpayers should respond promptly to these communications to avoid penalties or legal actions.