Any communication from the Income Tax department, especially
receiving a notice from them, can send shivers down anyone’s spine. However,
there are chances that it might only be a routine enquiry or a request for
An Income Tax notice can be issued for varied reasons, and
there’s no standard solution to deal with them. There are various kinds of
Income Tax notices.
Here are 12 golden steps to follow in response to any kind
of IT notice you may receive.
Don’t Panic or Ignore: Your first
reaction would be to press the panic button or ignore the notice completely.
Both these ways are wrong. The key is to handle the situation carefully and
sincerely, or you may end up paying a penalty of up to Rs 10,000 along with the
Is it issued to your PAN card number?
The Income Tax department issues notices based on the PAN card and not on the
basis of names. So make sure that the notice is issued to your PAN card, and
not to someone else who may have a similar name or date of birth as yours.
Identify the reason behind the notice:
Reasons could be a simple mismatch in TDS or inconsistency in your returns, or
some serious concerns like income concealment. It can also be a survey or
scrutiny of accounts.
Validity: Check the validity of the
notice and the timely issuance. Also check the section under which the notice
has been issued.
Issuer Details: Notice will mention the
officer in-charge, his or her designation, signature, address with details of
ward and circle number. Verify these details to avoid being cheated.
DIN: If the notice is delivered online,
then check the Document Identification Number.
Gather the documents: Start collecting
the documents that the department has requested via the notice. Documents
needed can vary depending on the gravity of the notice.
Letter: Prepare a covering letter along
with the set of documents.
Acknowledgement: Prepare two set of all
the documents required, along with a copy of the covering letter. Get your copy
stamped to maintain personal records, and as a proof of submission of the
documents thereby complying with the notice.
Reply on time: Always respond to the
notice on time even if you are unable to collect the required documents. You
can even ask for some time to gather all the documents. Timely response will
help establish that you are honest, and cooperating with the law.
Preserve the envelope: If you receive
the notice in an envelope, keep it safely as it will have the Speed Post number
that will work as evidence of its delivery to you.
Seek professional Help: If the gravity
of notice is high then it would be prudent to have a CA represent you;
otherwise you can follow the above steps and represent yourself in most of the
One of the major steps that you need to take regardless of
the notice, is to keep a track record of all your tax papers and financial
transactions in the last six years. This will help you substantiate your claims
in case of any scrutiny.