Cleared all your income tax dues? Only two days left to avoid penalty
March, 30th 2016
Have you received a notice from the I-T department seeking explanations on your previous year income that you have no clue about? The taxman has been turning on the heat on defaulters and non-filers. So, while you are preparing to file taxes for this year, make sure your old dues are clear and there are no back-logs or disputes in your returns from previous years.
In an advertisement published last week, the I-T department have alerted all those tax non-filers who have not filed their previous year returns. They have been asked to explain, e-file and pay the dues, if any. And the last date to reply is 31st March. A penalty of Rs 5,000 may be applicable to returns filed post the deadline.
While the replying to these notices is as easy as log-in on to the e-filing website and choosing an explanation from a drop-down menu, the complicated part is deciding which option applies to you.
"The non-compliance emails have been sent to taxpayers based on the information received from third parties such as banks, TDS returns and post offices," says Archit Gupta, Founder and CEO, ClearTax.in. The department is seeking further information on such particular transactions—incomes or investments that were not declared in the mentioned years' returns.
However, some of you must have received a notice even if you had filed a return. There is no need to panic. In that case, all you need to do is fish-out the acknowledgement number of your ITR for the year. Along with that you'll have to provide the date and mode of filing (paper or e-filing) as proof of your filing. However, after e-filing your return must also be verified. "If you did not verify your tax return or it was not verified timely; your return may have been considered 'invalid' or 'no ..
The process gets a little stretched out if you did not file at all. You will have to select an appropriate response for non-filing. Your answer would depend on the source of your income/investment, taxability of it and other tax filed for the year.
High-value transactions are especially under the scanner. Also, a lot of taxpayers who invested in stock but had a total income below the taxable limit of Rs 2.5 lakh have received these notices. In some of these cases the taxpayer did not file as they incurred a loss on these share trading. "If their total income was below the taxable limit, they can select the option 'Income from transaction is below taxable limit' and in the comments section explain that there was a loss from the transaction and the ITR was not filed as the total income was taxable limit," says Gupta.
All taxpayers who have got these notices will have to recalculate their tax dues for the mentioned financial year and outstanding balances, if any, must be paid before replying to the notice. "While responding to the notices, the taxpayer will then have to mention under remarks that although return has not been filed but tax has now been duly deposited by them," says Gupta. The remarks section has a limit of 250 words where you must mention that you are willing to re-file if the AO desires so.
In your calculations say there are no dues, you will need proper paper work to back your claims. Bank statements, TDS certificates, share trading statements, calculations of investments matched with inflows, safely in records must be saved in case there is any further inquiry from the tax departments.