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Income Tax Notice: Failure to respond to notice may lead to problems, taxpayers must know the rules.

Income Tax Notice: Failure to respond to Income Tax notice may lead to problems, taxpayers must know the rules.

The date for filing ITR is approaching. People make many efforts to save tax. Obviously, you may be asked questions in this regard by the Income Tax Department. If you receive any notice from the Income Tax Department, do not ignore it. Doing this can be difficult. Let us know about it in detail.

If the Income Tax Department asks you any question related to income or tax, then you should answer it within the stipulated time. If a notice is sent, respond to it immediately. If you do not do this, your Income Tax Return (ITR) may be selected for full scrutiny. Technically speaking, your ITR can be put in the category of intensive scrutiny. Apart from this, the Income Tax Department will also continue to question and answer you. Intensive scrutiny means that an individual’s ITR will be scrutinized to uncover various aspects of tax evasion, including misrepresentation of income, concealment of black money. The Income Tax Department can also conduct a search operation against such a person.

The Central Board of Direct Taxes (CBDT) has issued guidelines for selecting ITRs for full scrutiny. This is applicable only for the current financial year i.e. 2023-24. It has been said in the guidelines that where the Income Tax Department had conducted a survey in cases of tax evasion and seizure, where notices regarding tax evasion were sent, a thorough investigation of the income tax returns is necessary. A senior officer says that the Income Tax Department questions only those tax payers whose income details they have doubts about. The department feels that the taxpayer has given wrong information about income. Has hidden his income, which comes under the purview of black money. This is straight tax evasion.

Why is it important to answer?

In such a situation, when the Income Tax Department asks him any question, he should answer within the stipulated time. If the department is satisfied with its reply, the matter is closed. If the answers are not satisfactory then further action will be taken as per the prescribed rules. In such a situation, it is important to answer the questions of the Income Tax Department. This opens a way to settle the matter. If someone has accidentally made a mistake in giving correct information about income, then the matter can be resolved by paying a penalty. If the taxpayer is negligent in answering the questions, then the consequences can be fatal.

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