Receiving a notice from the Income Tax Department can be concerning, but it is not necessarily an indication of wrongdoing. The notices serve different purposes, including intimations, requests for additional information, scrutiny, or demands for tax payments. Understanding the nature of the notice and responding correctly within the stipulated time frame is crucial to avoid penalties and legal complications.
Variety of Notices and Their Portals for Response
Income tax notices can be broadly categorized based on their purpose and the portal through which they must be responded to. Below is an overview:
1. Income Tax Notices (Respond via Income Tax E-Filing Portal)
Intimation Under Section 143(1) – Issued after processing your return.
Scrutiny Notice Under Section 143(2) & 143(3) – Issued for a detailed examination of your return.
Demand Notice Under Section 156 – Issued for tax dues, penalties, or interest.
Inquiry Notice Under Section 142(1) – Issued for additional information or clarification.
Defective Return Notice Under Section 139(9) – Issued for errors in tax return filings.
Reassessment Notice Under Section 148 – Issued when income has escaped assessment.
Summons Notice Under Section 131 – Issued for mandatory appearance.
Intimation Under Section 245 – Issued for refund adjustments.
Rectification Notice Under Section 154 – Issued for correcting mistakes in returns.
Mismatch Notice – Issued when filed income does not match records.
Default Notice – Issued for non-compliance with tax obligations.
2. TDS Notices (Respond via TRACES Portal)
Short Deduction Notice – Issued for discrepancies in deducted TDS.
Late Filing Fee Notice – Issued for delayed TDS return filing.
Mismatched Challan Notice – Issued when challan details don’t match deductions.
Default Summary Notice – Issued for multiple TDS-related discrepancies.
Verification Notice – Issued for verifying TDS compliance.
3. Compliance Notices (Respond via Compliance Portal)
High-Value Transactions Notice – Issued for unexplained large transactions.
Non-Filing of Income Tax Return (ITR) Notice – Issued when ITR is not filed despite having taxable income.
Foreign Asset Declaration Notice – Issued for undeclared foreign income or assets.
Third-Party Verification Notice – Issued for verifying transactions based on reports from banks, mutual funds, and financial institutions.
How to Respond Based on Thresholds and Maximum Size Limits
Thresholds and Maximum Size for Responses
Time Limit – Most responses must be submitted within 15 to 30 days from the notice date.
Document Size – Uploads on the e-filing portal are generally limited to 5MB per document in PDF format.
Response Mode – Some notices require online responses, while others may require physical submission:
Online – Scrutiny responses, TDS defaults, defective return corrections.
Physical Submission – Summons under Section 131 or high-value transactions requiring manual verification.
Steps to Respond Based on Portal Type
Responding on Income Tax E-Filing Portal
Log in to https://www.incometax.gov.in.
Navigate to ‘E-Proceedings’ under the Compliance section.
Select the notice and upload the required response.
Submit within the stipulated timeframe.
Responding on TRACES Portal for TDS Notices
Log in to https://www.tdscpc.gov.in.
Check the notice details under ‘Defaults’.
Correct mismatches and upload Form 26Q/27Q if required.
Submit the response and pay any due amounts.
Responding on Compliance Portal
Visit the Compliance Portal via the Income Tax website.
Select ‘Pending Actions’ and review the notice details.
Upload the supporting documents for justification.
Submit the response within the required deadline.
Conclusion
Understanding the various types of income tax, TDS, and compliance notices, and knowing the correct portal to respond to them, ensures smooth compliance with tax regulations. Timely and accurate responses help avoid penalties and legal hassles. If faced with a complex notice, consulting a tax expert is advisable.
