Income Tax Notice to File Returns Compliance Form

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Income tax department identifies potential individuals who have carried out high value transactions in the financial year, but have failed to file the income tax returns in the applicable assessment year. So, the officials of income tax department send out notices to such non-filers. To keep a tab on such activities, the Income tax department has introduced NMS i.e. Non-Filers Monitoring System. This system is introduced to pick and prioritize action against non-tax-return-filers having potential income tax liability. The non-tax-return-filers are identified through data analysis. This data analysis is done on the information received through various channels namely: Banks via its TDS or TCS statements, Centralized Information Branch, Annual Information Return etc. Once the non-tax-return-fillers are identified, the income tax department sends out notice to such individuals via mobile SMS, electronic mails or letters.

If you have received any such notice, you can either physically or electronically file response. For submitting a physical response, you have to visit the nearest income tax department office. While in case of sending an electronic response, you only need to login to the income tax department’s e-filing portal. Assessee can view the notice and submit a response related to the same through the income tax department’s e-filing portal.

This response is to be given by the tax-payer in case of default of filing the income tax return for any assessment year. Follow the below given guidelines in order to file the response to a notice received in case of not filing the income tax return for particular assessment year. Thus, the following step by step guideline will help you understand the manner of responding to a notice received from income tax department.

• Step 1: Visit the official website of income tax department i.e. www.incometaxefilingindia.gov.in

• Step 2: Login to your account by entering valid Login ID and correct Password. Kindly note, if you have not registered your account with the income tax website, then filing the compliance is not possible. Thus, it is mandatory to register your account on the official website of income tax department using your PAN Card details.

• Step 3: Upon successfully log in to the account, click on the ‘Compliance’ Tab.

• Step 4: Under the compliance tab, click on ‘View and Submit my Compliance’ option. Under this section details of non-filing of Income tax returns will be furnished.

• Step 5: Furnish the appropriate reasons for not filling the Income Tax Returns. If you choose ‘other’, then switch to ‘Related Information Summary’ to furnish correct reasons by choosing any one of the following correct options.

  • Self-Investment/ expenditure is out of exempt income: the assessee must select this option if the information by third party is related to investment and/or expenditure is out of exempted income as defined under the Income Tax Act.
  • Self-Investment/ expenditure is out of accumulated Savings: the assessee must select this option if the third-party information is related to investment and/or expenditure is done out of accumulated savings.
  • Self-Investment/ expenditure is out of gifts/ loans from others: the assessee must select this option if the third-party information received is regarding investment and/or expenditure is out of gifts or loans received from others.
  • Self-Investment/ expenditure is out of foreign income: the assessee must select this option if the third-party information regarding investment and/or expenses is done out of foreign income.
  • Self-Income from transaction is exempted: this option must be selected by the assessee if the third-party information related to income and receipts of the assessee is exempted under the Income Tax Act.
  • Self-income from transaction is below taxable limit: This option is to be selected by the taxpayer if the third-party information about the income and receipts of the taxpayer is below the permissible taxable limit as per the slabs defined by the Income Tax Department.
  • Self-Income from transaction related to different assessment year: this option is to be selected if the information provided by the third-party agency regarding the income and/or receipts of the assessee is pertaining to some different assessment year and is taxable in different year.
  • Self Not Known: Taxpayer can select this option if the he / she has to furnish any other explanation related to the information obtained from the third-party agency related to income and/or receipts.
  • Other PAN: This option is to selected if you know that the information provided by the third-party agencies is related to another assessee and not you. Under this scenario, the assessee has to mandatorily provide the PAN details of such another assessee.
  • Not Known: this option can be selected if you have no details regarding the information provided to income tax department by the third-party agencies.
  • I need more information: You can select this option if you are aware of the information provided by the third-party agencies, but you want income tax department to provide you with more information pertaining to the same in order to submit the response.

Thus, in this manner every assessee must provide correct answer to the query put out by the income tax department. This is because in case of misappropriation, there are chances that the income tax department may further indulge in asking for more information.

In order to fill correct option, it is always recommended to take help from experts like practicing tax professionals or Chartered Accountants. As stated above, in case of incorrect submission, you may attract further scrutiny by the income tax department.

• Step 6: Upon selecting the best suitable option, click on ‘Submit’ button and your response to the income tax notice shall be sent to the income tax department.