Worried About Income Tax Notices? Himani Chowdhary Is Here to Guide
Understand the different types of income tax notices, why they are issued, and how to respond effectively.
Worried About Income Tax Notices? Himani Chowdhary Is Here to Guide
Photo Credit: Himani Chowdhary Instagram
- Himani Chowdhary is a finance influencer
- She shares things to do when you receive an IT notice
- She also explains what exactly are these notices, and why you receive the
Receiving an income tax (IT) notice can be alarming, but it's a standard method for the tax department to communicate with taxpayers. Finance influencer Himani Chowdhary demystifies these notices, explaining their types, reasons for issuance, and the steps you should take upon receiving one.
Types of Income Tax Notices and Their Purposes
1. Intimation Notices
- Purpose: These notices are informational, keeping you updated on your tax filing status, tax payments, or other relevant details.
- Action: Review the information for accuracy and keep it for your records.
2. Demand Notices
- Purpose: Issued when you owe taxes to the government, specifying the amount due. Reasons include miscalculations in your tax return, underpayment of taxes, or late filing penalties.
- Action: Verify the calculations and pay any outstanding amount to avoid further penalties.
3. Penalty Notices
- Purpose: Sent when you fail to comply with tax regulations, such as not filing your return on time or not paying taxes due.
- Action: Address the issue promptly to avoid additional penalties.
Understanding and Responding to Notices
- Legal Basis: Notices reference specific sections of the Income Tax Act, explaining the legal grounds for the notice and the corresponding consequences.
- Authenticity Verification: It's essential to verify the notice's authenticity to avoid falling victim to scams. The Income Tax department provides a facility on their website to check the genuineness of a notice.
Consequences of Ignoring Notices
Ignoring a notice can lead to severe consequences, including:
- Interest on outstanding tax plus a penalty of up to ₹10 lakh.
- Potential imprisonment for up to 1 year if compliance is still not met.
Receiving an income tax notice doesn't automatically imply wrongdoing. However, it's crucial to address it promptly and appropriately. Himani Chowdhary's advice emphasizes the importance of understanding the notice, verifying its authenticity, and taking the necessary actions to resolve any issues. By doing so, you can navigate the situation with confidence and avoid any unnecessary penalties or legal trouble.
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Further reading: Himani Chowdhary, Himani Chowdhary Instagram, Himani Chowdhary finance influencer, income tax notices, IT notice
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