A simple income tax notice from CBDT can cause serious panic in a household. The notice can be served in case of a discrepancy in the income tax amount calculated and paid by you while filing your income tax return (ITR) and that computed by the income tax department. If the tax department assesses that more tax is due from you than paid and declared in your return, then you would normally get a demand notice.
These notices are a part of the e-campaign on voluntary compliance started by the Central Board of Direct Taxes (CBDT) from July 2020. However, there is no need to panic. You just need to respond to these notices in timely manner
The taxpayer should match the finances with the ITR filed and if required, file a belated or revised ITR correctly declaring all the transactions. If there is no such transaction to be reported or there is no need to file or re-file the ITR, then an appropriate written response should be filed by the taxpayer in response to the notice received.
How to respond to the notice?
Log in to your account on the e-filing website.
Click on the ‘e-file’ tab and select the ‘Response to outstanding Tax Demand’ option.
A year-wise outstanding tax demand notice will appear on your screen with details such as assessment year (AY), section code (under which the notice has been served), demand identification number, date of demand notice, etc.
Click on ‘Submit’ in the response column for the appropriate AY to submit your response.
The assessee has to select one of these options:
Demand is correct
Demand is partially correct
Disagree with demand
Option 1 – Demand is correct
Confirm by clicking on submit. A success message will be displayed. If a refund is due, the outstanding amount and the interest will be adjusted against the refund due. Otherwise, you must pay the demand immediately. Read about how to pay your tax demand
Option 2 – Demand is partially correct
Enter the correct and incorrect amount. Also, provide a reason for the reason.
Option 3 – Disagree with the Demand
You will have to provide a reason for disagreeing with the demand. Submit your response to view a success screen with a transaction ID. You can revisit the response when you click on ‘View’ under the ‘Response’ tab.
You can view the serial number, transaction ID, date of response, and response type will be displayed.