Income tax notice Archives - Faceless Compliance

Income Tax scrutiny has reduced to 0.25% currently. Know State wise Scrutiny Percentage

Income Tax Department is changing-from just enforcement to facilitating better taxpayer services. In continuation of the same,the number of cases selected for scrutiny has reduced drastically over the years. Only 0.25% of all the returns filed in 2018-19 for scrutiny compared with 0.55% examined in 2017-18.

This happened despite a slowdown in direct tax collection growth rate and the peaking of the rise in number of returns filed. In 2018-19, less than half of the 3.7 lakh tax returns selected for scrutiny in the previous year were chosen, as per tax department figures.

Diagram below reflects the average overall percentage of scrutiny

Andhra Pradesh has 3,30,67,606 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Andhra Pradesh
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	24,73,474	0.59%
2016-17	29,84,813	0.38%
2017-18	33,64,531	0.60%
2018-19	38,93,990	0.21%

Arunachal Pradesh has 4,88,382 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Arunachal Pradesh
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	9,389	1.53%
2016-17	12,645	1.19%
2017-18	14,005	1.29%
2018-19	18,454	0.34%

Assam has 1,94,99,418 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Assam
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	4,70,681	0.56%
2016-17	5,62,248	0.26%
2017-18	5,59,621	0.53%
2018-19	7,75,399	0.15%

Bihar has 3,14,01,288 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Bihar
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	9,67,169	0.56%
2016-17	12,29,996	0.26%
2017-18	12,41,907	0.53%
2018-19	16,01,212	0.15%

Chhattisgarh has 77,71,200 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Chhattisgarh
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	6,23,013	0.54%
2016-17	7,34,299	0.30%
2017-18	7,89,017	0.46%
2018-19	9,59,336	0.13%

Delhi has 1,60,16,460 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Delhi
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	25,40,577	1.12%
2016-17	28,53,399	0.62%
2017-18	29,64,813	0.81%
2018-19	32,80,775	0.52%

Goa has 10,94,130 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Goa
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	1,47,121	1.75%
2016-17	1,66,934	0.46%
2017-18	1,71,557	0.57%
2018-19	2,07,332	0.34%

Gujarat has 2,66,50,070 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Gujarat
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	44,95,482	0.65%
2016-17	52,52,313	0.36%
2017-18	53,10,939	0.44%
2018-19	59,55,745	0.23%

Haryana has 1, 60,43,033 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Haryana
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	15,16,201	0.51%
2016-17	18,09,072	0.32%
2017-18	18,73,603	0.49%
2018-19	21,86,710	0.21%

Himachal Pradesh has 32, 33,942 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Himachal
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	3,23,239	0.35%
2016-17	3,74,758	0.21%
2017-18	4,03,595	0.29%
2018-19	4,79,307	0.12%

Jharkhand has 1, 01, 40,737 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Jharkhand
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	6,80,799	0.37%
2016-17	8,15,345	0.19%
2017-18	8,44,588	0.30%
2018-19	10,38,270	0.09%

Jammu and Kashmir has 39,30,927 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Jammu and Kashmir
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	2,17,221	0.61%
2016-17	2,74,000	0.31%
2017-18	2,93,357	0.41%
2018-19	3,71,565	0.10%

Karnataka has 3, 11, 70,263 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Karnataka
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	24,45,570	0.88%
2016-17	27,84,126	0.53%
2017-18	28,37,646	0.86%
2018-19	33,93,288	0.37%

Kerala has 1, 49, 95,615 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Kerala
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	9,60,326	1.01%
2016-17	11,28,638	0.58%
2017-18	12,76,857	0.76%
2018-19	15,55,670	0.29%

Madhya Pradesh has 1, 94, 76,833 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Madhya Pradesh
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	16,03,407	0.46%
2016-17	18,98,319	0.24%
2017-18	19,12,403	0.45%
2018-19	23,91,707	0.14%

Maharashtra has 6, 66, 52,893 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years. (27/n)

Maharashtra
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	74,88,977	0.98%
2016-17	84,37,405	0.58%
2017-18	85,62,386	0.60%
2018-19	97,75,673	0.38%

Manipur has 9, 20,008 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Manipur
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	17,266	1.01%
2016-17	23,898	0.77%
2017-18	26,643	1.36%
2018-19	41,669	0.22%

Meghalaya has 7, 71,046 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Meghalaya
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	20,671	0.99%
2016-17	26,326	0.93%
2017-18	28,188	1.82%
2018-19	34,417	0.47%

Mizoram has 2, 11,927 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Mizoram
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	1,491	0.47%
2016-17	2,026	0.94%
2017-18	2,308	1.82%
2018-19	3,122	0.35%

Nagaland has 15, 08,110 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Nagaland
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	9,825	1.47%
2016-17	12,893	1.08%
2017-18	13,393	1.49%
2018-19	17,111	0.32%

Odisha has 1,03,88,446 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Odisha
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	7,09,926	0.46%
2016-17	8,31,196	0.25%
2017-18	8,31,760	0.37%
2018-19	10,29,404	0.12%

Puducherry has 4,98,976 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Puducherry
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	51,761	0.68%
2016-17	61,161	0.45%
2017-18	65,762	0.60%
2018-19	78,370	0.25%

Punjab has 1,65,16,616 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Punjab
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	19,31,487	0.39%
2016-17	23,08,098	0.21%
2017-18	23,44,699	0.40%
2018-19	27,65,312	0.14%

Rajasthan has 2,27,95,908 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Rajasthan
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	25,96,990	0.44%
2016-17	31,18,486	0.24%
2017-18	31,93,052	0.36%
2018-19	37,45,748	0.13%

Sikkim has 2,74,072 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Sikkim
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	6,660	0.60%
2016-17	8,090	0.63%
2017-18	8,681	1.16%
2018-19	10,727	0.57%

Tamil Nadu has 3,34,43,221 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Tamil Nadu
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	26,60,339	0.89%
2016-17	32,15,402	0.48%
2017-18	33,77,184	0.66%
2018-19	40,72,285	0.30%

Telangana has 11,07,013 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Telangana
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	1,31,596	1.04%
2016-17	1,54,687	0.64%
2017-18	1,58,572	0.94%
2018-19	1,84,639	0.50%

Tripura has 12,75,684 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Tripura
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	40,990	0.46%
2016-17	52,094	0.24%
2017-18	54,153	0.37%
2018-19	79,009	0.12%

Uttar Pradesh has 6,77,48,315 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years. (10/n)

Uttar Pradesh
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	35,90,824	0.44%
2016-17	43,71,002	0.24%
2017-18	45,35,720	0.45%
2018-19	54,94,824	0.13%

Uttarakhand has 49,08,928 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years.

Uttarakhand
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	4,57,005	0.35%
2016-17	5,44,097	0.25%
2017-18	5,68,600	0.37%
2018-19	6,91,954	0.11%

West Bengal has 3,92,14,835 PAN card holders. Here is the data on the number of ITR filers in the State and the percentage that have been selected for scrutiny over four assessment years. (12/n)

West Bengal
Assessment Year	Number of ITR Filers	% Scrutiny
2015-16	28,01,114	0.87%
2016-17	32,58,535	0.37%
2017-18	33,64,531	0.59%
2018-19	38,93,990	0.25%

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9 Reasons why you might receive Notice from Income Tax Notice

An income tax notice is a written communication sent by the Income Tax Department to a taxpayer alerting an issue with his tax account. Taxpayers, in general, are issued income tax notices under the Income Tax Act, 1961 regarding non-filing of ITR, concealment of taxable income, claiming an in genuine tax refund, computing excessive tax losses, long term capital gains (LTCG), scrutiny etc.

Here are some common reasons where an assessee might get an Income Tax Notice

1) Delay in filing income tax returns (ITR)

Filing of tax return where the individual has taxable income is mandatory under section 139(1) of the Income Tax Act.
If one has not filed the return by the deadline, one will receive a reminder notice from the income tax department.
The notices for non-filing by the due date are generally automated reminders which point out the obligation under section 139(1) and remind taxpayers to file their returns to avoid penalties.
A notice under section 142(1) may be issued requiring the taxpayer to furnish the return if the same is not filed within the due date by an Assessment Officer (AO) in the course of assessment proceedings.

2) Filing defective return

If income tax returns are not filed in the correct form or there are mistakes while filing an income tax return, one will receive a defective return notice from the income tax department.
Mistakes can vary from filing incomplete information, claiming deduction under the wrong section or missing out on any specific income ignored completely.
If you have incorrectly filed your ITR, you may need to file a revised ITR before the deadline ends.

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3) Misreporting LTCG from equity

You need to report any realised long-term capital gains (LTCG) on listed equity and equity-related mutual funds at the time of filing ITR.
Reporting LTCG on equity can be a bit complex for taxpayers.
One should ensure that the right computation is done and the information is mentioned correctly.
A simple calculation error may get you a demand notice, where the tax department can ask you to pay the tax due.

4) Not declaring investments made in the name of spouse

Cases where one would have made investments in the name of their spouse but have not shown the income from those investments in their return.
In such a scenario, any income from such investments can be taxable in the hands of the assessee and not the spouse and the assessee will have to declare it at the time of filing returns.
Before filing the ITR, it would be prudent to consider the income arising to the spouse out of assets acquired out of the income of the tax payer.

5) Non-disclosure of income

If you have not shown some income in your ITR, then you may get a notice from the income tax department if they detect the non-reportage.
If the income tax department receives any information that some income such as bank interest income or income from shares, etc. has not been disclosed by the assessee, then the income tax department will send the assessee a notice for non-disclosure of income.
Hence, before filing the return, it is prudent to check Form26AS and the details of overseas incomes (in case of resident and ordinarily resident) like overseas bank statements, payslips etc., to ensure that all incomes reflecting therein are disclosed in the return of income.

6) Setting off refunds against remaining tax payable

If the assessee has claimed a refund on the tax paid but there are still some previous tax dues payable, them the AO may send the assessee a notice.
The AO will give intimation in writing to such taxpayer of the action proposed to be taken regarding the refund claimed.
The AO can ask for the pending demands from the previous years to be adjusted with the refund amount.

7) TDS claimed not matching with Form 26AS

While filing ITR, the TDS should ideally have to be the same in Form 26AS and Form 16 or 16A.
However, there can be several reasons why some details may mismatch.
Notices for TDS mismatch are issued under section 143(1).
The reason for getting this notice is a mismatch in the TDS reported by the deductor to the revenue authorities and the TDS claimed in the return of income by the assessee.

8) High Value Transactions

Following are certain high value transactions for which notices may be issued by the Income Tax Department

Aggregate deposits in savings bank account of Rs 10 lakhs or more
Purchase of bank drafts or pay orders in cash for Rs 10 lakh or more
Deposits or withdrawals to/from current accounts of Rs 50 lakhs or more
Purchase or sale of immovable property having circle value (registered value) of Rs. 30 Lakh or above
Aggregate New Fixed Deposits of Rs 10 lakh or more
Payment of credit card in cash of Rs 1 lakh or more
Non cash payment of credit card of Rs 10 lakh or more
Cash received on account of sale of goods or rendering of services exceeding Rs 2 lakh
Purchase of any pre-paid instruments issued by RBI of Rs 10 lakh or more in a year
Expenditure in foreign currency via debit card, credit card or traveler’s cheque for the amount Rs.10 Lakh or more
Mutual Fund Investment in a year of Rs 10 lakh or more
Purchase of bonds or debentures for Rs 10 lakh or more in a year
Purchase of shares of company for Rs 10 lakh or more
Share buy-back from a person amounting Rs. 10 lakhs or more

9) Tax evasion in earlier years

The Income Tax Act gives the IT department power to reassess previously filed ITR’s.
An AO can pick tax returns for reassessment based on certain pre-defined criteria.
Notice for reassessment is sent only when tax officer has reasons to believe that income which was chargeable to tax has escaped assessment.
This provision is normally used in cases where tax officer has reliable and corroborative evidence of high-value tax evasion.

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