Here is a brief description about five types of important IT notices and how you should respond them and penalties which can be imposed on you if you don't respond it timely.
3. Came in section 143(1) of Income tax Act.
Just an intimation, where no action could be needed.
To clarify errors in IT forms.
To seek some information from the individual.
4. 2. Scrutiny Notice
Came under section 143(2) and 142(1) of IT act.
Send to seek information regarding your declaration.
Should be taken seriously.
Provide the document what they are asking for.
5. 3. Showcase Notice
Send when IT department believes that you are declaring
less than what you have.
Or you have not filed your IT returns.
Serious Kind of notice.
It can also be send in case of non-satisfactory replies of
previously sent notices.
6. 4. Prosecution Notice
Here IT department don’t want any clarification from
you.
Here you have to justify your stand in the court of law.
It’s another level of seriousness which IT department
brings in.
7. 5. Foreign assets holding Notice
Send when assets are created without paying tax outside
the country.
Either you are buying something inside or outside the
country you are liable to pay taxes.
If someone fails to pay these taxes then they might get
foreign asset holding notice.
8. Process of Responding IT Notices
If you are running a business, you should have concern with CA, as
they can give you detailed advice on how you can respond these
notices.
If you are filing your IT return online then there might be a
chance that you will get IT notices in form of E-mails rather than
in physical form.
Respond IT notices timely.
You can ask for more time, if unable to justify your stand upto
deadline.
9. Penalties
It could be as low as Rs. 10,000.
It could be as high as 300% of the total taxes
you have to pay.
