02 Nov
Income Tax Scrutiny: What You Need to Know
Income Tax Scrutiny: What You Need to Know
Income Tax Department reviews the
Income-tax returns of thousands of Indians each year. They monitor the pattern
of the individual's income tax return filing. Random selection of some scrutiny
cases done by the Income Tax Department and others are selected deliberately as
they fall under the criteria of pre-set watch lists that the Income Tax
Department has laid down. One must remember that if you have received an Income
Tax scrutiny notice, there is no need to sweat about it.
Why Are Scrutiny Notices Issued?
1. Failure
to File a Return: If you fail to file a return, it can
trigger scrutiny.
2. Sudden
Income Changes: A significant change in your income may
attract attention.
3. High-Value
Transactions: Large financial transactions can lead to
scrutiny.
4. Mismatch
in TDS Credits: Differences in Tax Deducted at Source (TDS)
data can raise flags.
5. Undeclared
Exempted Income: Failure to report exempted income can lead
to scrutiny.
Types of Scrutiny Assessments
1. Manual
Scrutiny Cases: Selected based on criteria defined by the
Central Board of Direct Taxes (CBDT).
2. Complete
Scrutiny Cases: Involves a thorough examination of the
entire return.
3. Limited
Scrutiny: Focused on specific areas of the return.
4. Re-assessment:
Done when the assessing officer believes certain incomes were not assessed.
Consequences of Non-Compliance
Failure
to respond to the notice can result in a penalty of Rs. 10,000 and additional
taxes. The Assessing Officer may proceed with a 'Best Judgment' assessment.
Defaulting taxpayers could face more rigorous assessments, including surveys or
search and seizure operations.
How to Handle a Scrutiny Notice
1. Don't
Panic: It's often a routine check, so stay calm.
2. Read
Carefully: Review all the details of the notice.
3. Organize
Documents: Prepare your documents for possible
submission.
4. Never
Ignore: Do not ignore the notice; provide all
required information.
5. Respond
Promptly: Meet all deadlines and respond promptly.
6. Please
make sure to record Your Scrutiny Number:
Keep it for future reference.
7. Seek
Expert Advice: If you're unsure, consult with a Chartered
Accountant for guidance.
Why Alliance Tax Experts
·
Accessible via mail, WhatsApp, calls, or
in-person.
·
Provide results-driven solutions.
·
Offer comprehensive financial, taxation, accounting,
and legal services.
·
Support the entire compliance process.
·
Ensure seamless paperwork.
·
Prioritize quality.
·
Always accessible, approachable, and
accountable.
For
expert assistance with your Income Tax scrutiny, contact us today.
For expert assistance with
your Income Tax scrutiny, contact us today.
Email:
santoshpatil@alltaxfin.com
Phone: 9769201316
WhatsApp: 9769201316
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