Twitter
Advertisement

10 ways to avoid getting an IT department notice

With the Income Tax department becoming net savvy, it is now very easy for them to identify discrepancies in your papers, and to keep a close eye on almost every financial transaction that you engage in. Even honest taxpayers have received notices and have come under scrutiny, causing them to run around to prove their innocence. Which is why it becomes very critical for everyone to maintain their papers and documentary evidence properly, to safeguard their own interest.

Latest News
article-main
Representational image
FacebookTwitterWhatsappLinkedin

In the previous article, eight reasons you may get an IT department notice, I had explained various circumstances under which it is possible for you to receive a notice from the Income Tax department. In this article, I will take you through certain measures that you can follow to avoid getting a notice. 

With the Income Tax department becoming net savvy, it is now very easy for them to identify discrepancies in your papers, and to keep a close eye on almost every financial transaction that you engage in. Even honest taxpayers have received notices and have come under scrutiny, causing them to run around to prove their innocence. Which is why it becomes very critical for everyone to maintain their papers and documentary evidence properly, to safeguard their own interest.

These are certain measures you need to follow to minimize your chances of getting a notice:

1) Always file your returns on time and correctly: This is the basic precaution you need to take to ensure 100% compliance with the law. Make sure you file the return correctly, and all the details while filling the returns match the details already available with the IT department.

2) Submit ITR V to Centralized Processing Centre (CPC) Bangalore: Your tax return filing is only considered complete when the ITR V reaches the CPC. Just uploading returns online is not enough; make sure you get a confirmation of its receipt from the CPC. Please follow the dos and don'ts of sending the ITR-V to the CPC correctly.

3) Check your form 26AS (Tax Credit Statement): '26AS' gives the details of the 'TDS' deposited on your behalf. You should check all the TDS payments duly credited to you or get them rectified. You can view them though NSDL or on the IT department’s website, or even through your bank’s online portal.

4) Mismatch in income and expenses/investments: If your income in the year was Rs 10 lakh, and you invested Rs 25 lakh, you will need to justify the source of the used funds; the same applies to expenses also.
 
5) Gifts/money credited to your account: If you have funds credited to your account out of gifts or loan from relatives/ friends, you need to maintain documentary evidence for it. You may also need to report these transactions at few instances.

6) Declaring “exempt” income: Even though few incomes are exempt from taxation, you still need to declare it while filing your returns.

7) Updating PAN details: Keep updating any changes in your pan data like address/surname change after marriage, etc.

8) Pay advanced tax: If you are liable to pay advance tax, then make sure you pay it as per its schedule and deadline. 

9) Form 15H or 15G: Use 15H/15G instead of claiming refund. Submit this at financial institutions like banks, to prevent them from deducting TDS on your investments with them, in case your income is below the taxable limit.

10) Avoid high value transactions: The department gets information of all your high value transactions from the concerned institution, and the chances of you coming under scrutiny increases. Avoid these transactions wherever possible and plan them carefully and legally. 

Find your daily dose of news & explainers in your WhatsApp. Stay updated, Stay informed-  Follow DNA on WhatsApp.
Advertisement

Live tv

Advertisement
Advertisement