ITR filing deadline is over: Received a tax notice after July 31 due date? Here’s how you should respond

The July 31 income tax return (ITR) filing deadline may be over, but taxpayers should not assume that their compliance journey has ended. The income tax department may send notices after submission of ITR for reasons such as mismatch income details, unreported interest or capital gains, incorrect deductions, and other such discrepancies.

Receiving an income tax notice can be stressful, especially for first-time filers, but the most important thing is not to panic or ignore it. Usually these notices are issued to seek clarity or resolve small mismatches in the filed tax return.

Hence, taxpayers should first carefully read the notice, check the section under which it has been issued, compare the details with their filed return and supporting documents such as Form 16, AIS and others, then respond within the specified deadline through the income tax e-filing portal.

How to respond to a tax notice?

You may receive a scrutiny notice in the form of a PDF on registered email address, as well as your postal address. You should verify whether the communication is genuine before responding to it.

A registered user can also add or withdraw an authorised representative to respond to tax notice, intimations or letters.

Another way of checking for a notice is by logging into the income tax department’s e-filing portal. If you got a notice from the tax department, here’s what you need to do next:

Step 1: Log in to the e-filing portal using your user ID and password.

Step 2: On your dashboard, click Pending Actions > e-Proceedings.

Step 3: On the e-Proceedings page, click on Self.

Step 4: Choose the notice to respond, and click on it. If you wish to download the notice, click on the download option.

Step 5: Click on ‘Submit Response’.

Step 6: You can either select ‘Agree’ or ‘Disagree’

Step 7: Select the Declaration checkbox.

After successful submission of your response, a success message is displayed along with a transaction ID. Please keep a note of that ID for future reference.

You will also receive a confirmation message on your email ID registered on the e-filing portal shortly after you are done with the process.

What if you disagree with the notice?

If you agree to the notice, you can upload the JSON file of ITR generated by offline utility and submit. However, if you disagree with the details, choose the reason for your decision and submit.

If you wish to view the response submitted, click View Response on the Successful Submission page. You will be able to view the details of notices, as well as the response or remarks provided.

What happens if you do no respond?

Taking income tax notices lightly can lead to severe consequences, especially if you do not respond to the income tax department within the stipulated time period, according to a Cleartax report.

Such a defaulter may be subject to a penalty of ₹10,000 under Section 272A for each failure to respond. In some cases, the assessing officer can proceed with a best judgment assessment under Section 144 based on available information.

This can result in a higher taxable income being assumed, which can lead to a higher tax and penalty payable by the taxpayer. If you choose to dispute the higher tax demand, a minimum of 20% of the tax due must be paid before you file an appeal with higher authorities.

In more serious cases of non-compliance or deliberate misreporting, the matter may also escalate to prosecution, which can, if proven, lead to imprisonment. Hence, it’s best to comply with the norms and send a response even if you don’t agree with the tax notice.