It is not uncommon to be served with income tax notices because many people may not be aware of what they are supposed to do. Most tax notices alert the recipients about the issue that needs to be addressed or corrected immediately. Whatever reason is behind your notice, never ignore the notice because the tax department can impose fines of up to Rs 10,000 if the concerned party fails to reply to the notice in assessee.
The number of people being served with income tax notices has increased in the recent times partly because of the positive effects of improved monitoring as a result of stricter customer identification process and enhanced online tax filing returns on data processing. The benefit of …show more content…
Investments made under the family name
It has become a tradition for family members to make investments or purchase assets in the in the name of their family or family members. Unfortunately, most people who do this are driven by the motive to evade taxes.
However, incomes coming from extra investments will attract taxes in the assigned member’s name. If these incomes are not declared when filing taxes, they may attract the attention of the tax department. If you receive this notice, you should immediately declare your income and make the necessary corrections.
6. Documentation review
Documents are not usually requested when filing the file returns because the Income Tax Department expects and obligates you to enter the right information. However, once in a while, the tax department may review your documents to ascertain the basis of submitting your returns if the need arises. When you are called upon to do so, you should submit your documents as requested.
7. Reporting of high value transactions
High value transactions such as bank cash deposits of over Rs 10 lakh; purchases of over Rs 30 lakh; mutual funds over Rs 2 lakh; credit card purchases that exceed 2 lakh and other stipulated spending need to be reported to the Income Tax …show more content…
In its new strategy to enforce tax compliance among the populace, the Income Tax Department has started perform random scrutiny of tax returns. If you are a recipient of this type of notice, you need to first check its validity and respond according without delay.
When you get a tax notice, simply oblige with the demands of the taxman and avoid panic, because failure to respond to the notice can cost you a lot of money and deprive you of peace of mind, not to mention imprisonment in the worst case scenario. Uptra Consultancy Services that will help you file your returns and keep your books safe. The Chennai based accounting firm has a team of highly dedicated professionals who include chartered accountants, auditors and