Income tax notices for salaried individuals: How to handle

For most salaried individuals, seeing an income tax notice pop up can be unsettling. After all, if taxes are already deducted from your salary every month through TDS, you might assume everything’s been taken care of. But receiving a notice doesn't always mean you've done something wrong.

In fact, many of these notices are routine. Whether it's a mismatch in income details, an adjustment in your expected tax refund, or a request for clarification. These issues can usually be resolved smoothly and without stress.

"The first move is to read the note well and get what it's about, be it an income mix-up, tax back change, or need for more papers. With a tax back change note, the tax office might have used your expected tax back to clear past tax you owe. It’s key to check their claim by looking at old tax forms, Form 26AS, and the tax details in the note, " explained CA Siddharth Maurya, Founder & Managing Director, Vibhavangal Anukulakara Pvt. Ltd.

If you are okay with the change, you just keep the papers. If not, you can send back your view on it online with needed papers. Answering fast and getting help when needed can sort out things well, the CA added.

How to handle an income tax notice: Step-by-step guide

⦁ Begin by carefully reading the notice to understand the reason it was issued.

⦁ Gather all relevant documents that support your tax filings. This may include your ITR copy, Form 16, Form 26AS, proof of deductions or investments, bank statements, and any other financial records related to the notice.

⦁ Respond within the deadline mentioned in the notice. Timely compliance is crucial to avoid penalties or further legal complications.

⦁ When replying to the notice, make sure to attach all necessary supporting documents that validate your explanation or dispute.

⦁ If you are unsure how to proceed or if the issue seems complex, it's best to consult a qualified tax professional. They can help you respond accurately and avoid common pitfalls.

⦁ If you are replying through the Income Tax e-filing portal, always check for an acknowledgement or confirmation from the portal to verify that your response has been received.

⦁ After submission, keep monitoring your email, the income tax portal, and SMS alerts for any follow-up communication.