Skip to main content

Income Tax Notice under Section 245

 There are a lot of taxpayers who are receiving intimation from the Income Tax Department under Section 245 of the Income Tax Act but they are often not able to understand the situation and what this actually means for them. In many cases the mere mention of some intimation from the tax department is enough to scare the taxpayer but this kind of step might require some quick action from the side of the investor and they have to pay attention to the details. There are now options to ensure that the right effect is given to the various conditions and the taxpayer does not end up suffering at the end of the day. Here is a look at the entire situation and how a taxpayer can respond to this kind of situation.

Meaning of intimation

The Income Tax Act allows the tax authorities to set off a refund that has to be paid by the tax department against some previous outstanding tax amount that the taxpayer has to be paid. However this does not mean that any adjustment can be done without the knowledge of the taxpayer. Under Section 245 this kind of adjustment can be done only after a proper notice is given to the taxpayer and they are given an opportunity of correcting any mistake that might have occurred in the raising of the demand. The intimation that is being received by the taxpayers is due to this condition wherein they are being informed that their current years refund is being adjusted against some past outstanding.

First step

The moment such intimation is received from the tax department the taxpayer has to first check the details of the previous outstanding tax demand against which the refund is being adjusted. This is significant because of the fact that it is not necessary that every past demand raised is correct. There have been a lot of cases wherein the demand raised have not been proper and hence the taxpayer does not have to pay this amount so this has to be taken care of. This will require some work on the part of the taxpayer because the previous demand can stretch back several years and to get the exact situation will require that the old details be looked at once again.

Time period

The intimation under Section 245 will also mention the time period during which the taxpayer has to respond after which if there is no reply then the adjustment would be completed. This time period is important and the earlier the reply is filed by the tax payer the better it is. In the online filing website the taxpayer will have to log in and under the e file segment they will need to go to the response to outstanding tax demand section. Here one can view the details of the demand and the reply can also be submitted here which can be under three heads. This would be that the demand is correct or it can be demand is partially correct and the third head is you disagree with the demand. There will be a way to reply to the outstanding demand but if this facility is not present then the meaning of the step is that the demand has already been finalised by the assessing officer. Since there is a specific time period that is allowed for the reply of the tax payer it is important for them to adhere to this as the facility for replying could then close which would end the matter. This is also the reason why every intimation needs to be seen immediately and then action taken in the matter.
-----------------------------------------------
Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds

Top 10 Tax Saving Mutual Funds to invest in India for 2016

Best 10 ELSS Mutual Funds in india for 2016

1. BNP Paribas Long Term Equity Fund

2. Axis Tax Saver Fund

3. Franklin India TaxShield

4. ICICI Prudential Long Term Equity Fund

5. IDFC Tax Advantage (ELSS) Fund

6. Birla Sun Life Tax Relief 96

7. DSP BlackRock Tax Saver Fund

8. Reliance Tax Saver (ELSS) Fund

9. Religare Tax Plan

10. Birla Sun Life Tax Plan

Invest in Best Performing 2016 Tax Saver Mutual Funds Online

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

---------------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Leave a missed Call on 94 8300 8300

-----------------------------------------------

Popular posts from this blog

Atal Pension Yojana contribution Tax Benefit for spouse

Contributions to Atal Pension Yojana (APY) are eligible for the same tax benefits as the NPS. This means that the contributions can be claimed under Section 80CCD (1B). The current limit for Section 80CCD (1B) is   Rs   50,000, over and above the   Rs   1.5 lakh limit under Section 80C. Section 80 CCD (1) is a different one, meant to cover employers' contribution towards NPS . You cannot get tax benefit by investing in the name of your spouse under Section 80 CCD . ------------------------------ ----------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in India for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Religare Tax Plan 4. DSP BlackRock Tax Saver Fund 5. Franklin India TaxShield 6. ICICI Prudential Long Term Equity Fund 7. IDFC Tax Advantage (ELSS) Fund 8. Birla Sun Life Tax Relief 96 9. ...

Franklin India High Growth Companies Fund

Franklin India High Growth Companies Fund Online One of the key developments that the Street is keenly waiting for is a cut in interest rates by Reserve Bank of India . With demand rising gradually, a rate cut is expected to boost earnings growth for companies. In such a situation, schemes which invest in high growth companies are best suited, especially when seen from a long-term perspective. One such scheme is Franklin India High Growth Companies Fund. Fund managers Anand Radhakrishnan, Roshi Jain and Srikesh Nair strictly follow valuation parameters when it comes to choosing stocks.Valuation parameters, such as enterprise value, price-to-earnings growth ratio, forward price-to-sales ratio and discounted earnings per share, play a critical role in selecting companies for investments. Taking into account these parameters, the fund managers invest in companies which are poised for high growth in their respective sectors. This approach has been in favour of the scheme and it has perform...

Avoid NFOs

  Don't get taken in by the flurry of new fund offers. You will be better off sticking to the tried and tested schemes.   For the past one year, to cash in on the bull run in equities, mutual fund houses have gone on a new fund offer (NFO) overdrive. But experts are unanimous in their advice: avoid NFOs . While past performance is not an indicator of how a fund will fare in the future, it does tell the investor how skilful the fund manager is. This crucial information is missing in an NFO. Not only is there no track record to judge an NFO by, many NFOs are similar to funds that already exist. If the new fund is similar to existing funds, you are better off investing in the latter. Around 67% of the new launches in 2014 were closed-end products. Investing in the NFO of a closed-end fund is doubly risky. In case the fund's performance is lacklustre, a closed-end fund does not allow you to exit. Even though closed-end funds are listed on the stock...

Debt Mutual Fund Dividends are Taxable

DDT is deducted when a non-equity fund declares dividends. Equity and balanced fund dividends are tax-free The AMC is correct to deduct the dividend distribution tax (DDT) as it is mandated by tax laws. DDT in mutual funds is deducted every time a non-equity fund declares dividends. Equity fund and balanced fund dividends are tax-free . It is possible that you have invested in a non-equity fund for the first time or have received the dividend under a non-equity fund for the first time. That is why this is the first occasion when you have come across DDT.   The rate at which non-equity schemes deduct DDT has also gone up after the July 2014 budget. This is due to a change in calculation methodology. Earlier, if the fund has to declare a dividend of R 100, it used to make a provision for R 128.3, paying R 28.3 to the taxman and distributing the balance to the investor. This allowed the investor to bear less tax since the effective tax rate was 22.07 per ce...

Shift from Debt to Equity - Arbitrage Funds

   In addition to generating returns comparable with debt options, arbitrage funds also enjoy the tax advantage of equity funds.   Arbitrage fund investors had been worried about the category being clubbed under non equity funds in the recent Budget. As this did not happen, there is relief among them as they can continue to enjoy tax benefits. Arbitrage funds cash in on the opportunities that exist between the spot and the futures market. They pair trade--buy in the spot or cash market, while simultaneously locking-in a higher price for the same in the futures market. They pocket the difference when the sale actually happens. Their risk profile is very low--comparable to short term debt funds . Fund managers try to maintain their equity holdings in the cash market above the 65% mark, so that these schemes are classified as equity funds. Equity funds do not incur capital gains tax if held for more than one year and, if held for less than a year, sho...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now