Tackling notice from tax department for not filing of IT return

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There are a lot of people who have started getting notices from the Income Tax Department for not filing their tax returns for previous years. The notices inform the taxpayer that the records show that they have not filed their returns for a specific time period and then demand an explanation as to why this has been done. There is also a chance provided to the taxpayer to come clean and ensure that they declare all the income for the respective year and file their returns. This move has started as the tax department has sophisticated technology tools at its disposal which is now being used effectively to find out who has been slipping out of the net. This is causing a lot of worries for taxpayers and here is a look at how one should respond when such a notice is received and the implications of the move.

Actual requirements to file

There will be a lot of cases where the individual would have to actually file their tax return but they have not done so out of sheer laziness or due to lack of effort on their part. Many people keep putting off the inevitable till as long as they can and in many cases this results in a situation where they end up missing the deadline. They then wait for the next deadline to appear and it could be that now the tax notice has reached them before they have acted. If this is the case then this notice should be taken as a strict deadline and the return should be filed. This will involve collecting all the details regarding the income of the past year and then going online and filing the tax return. There are times when the return has been filed but some details have been missed out and if this is the case then the individual should make the necessary changes in the tax return and file the required revised return. One thing that needs to be known is that the income tax return can be filed only till 2 years after the end of the financial year. This means that for the year ended March 2014 the time period already expired in March 2016. Once this time period is over the return becomes time barred and then the individual cannot file returns on their own but have to wait for a notice from the tax authorities and then file a reply to that notice.

No requirement

Just because a notice has come from the tax department it does not mean that the individual tax payer has made some mistake or that they have defaulted. There are several people who would have a genuine reason why they have not filed their return. One such detail is that if there is no income then the return would not have been filed. The rule till now was that if the taxable income was below the basic exemption limit then there was no need to file a tax return. There can be several categories of people and this could be someone who has no job or someone who is a very senior citizen and has income below the basic exemption of Rs 5 lakh available for that category of taxpayers and so on. If such people had not filed their return and they have got a notice from the tax department then they can reply to the notice clearly stating the actual position and this would be fine. There is no need to worry for such people and they should immediately file their replies. What often happens is that such notices are ignored which is the wrong thing to do and action has to be taken immediately to solve the issue.