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What to do If you get a notice from IT Department even after paying tax?

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TAXPAYERS often end up in a strange situation if they bear the brunt of the mistakes by the income-tax department when it comes to their tax assessments. In recent times, there has been another round of such examples that have come to light as several taxpayers have received information from the tax department about some small amount that they have to pay or this will be adjusted against their refund if there is a refund due. The individuals are mostly the salaried and they are perplexed as to what to do under these circumstances, as this is not due to their fault but some mistake in the computer software of the tax department.

Nature of event:

The way in which the sequence of events have worked out is that people have been receiving intimation from the income-tax department that they need to pay a small amount on the completion of their assessment.

If the taxpayer looks at the details of the income that they have earned and the tax computation that has taken place then there is no way in which such a demand should arise. The demand has actually arisen due to the fact that there is some mistake in the software of the tax department that is not calculating the benefits that should be due and hence, a common figure is arising that does not actually have to be paid by the individual tax payer.

Salaried:

There are a few points that need attention when this position is being considered. This kind of experience being witnessed by the salaried class people is a big shock, as usually the salaried do not have any amounts outstanding as the whole amount is actually paid as tax deducted at source. The other point is that there could be a few cases where some additional tax might have to be paid by the salaried individual but this is not the same amount for everyone. Also, such a large number of people usually would not have to pay the additional tax, as not everyone would miss out on the same point. All these details make the situation a bit perplexing for those who end up facing notices for additional tax.

Action:

The key point for an individual once he or she receives a certain notice is not to ignore this.

The risk if this is ignored is that the tax department would keep the demand open and then in the future if there is some refund then they would adjust this against it. The situation is even more risky if there is a refund in the year for which the additional demand has been raised because if there is no action then a lower amount of refund would be given back to the individual. So the first step would be to get out all the details of the return that has been filed and then list out the mistake that the tax department has made while making the calculation from their side.

The necessary process for intimation of the same has to be done so this can be filed electronically or sent to the tax officer depending on the year for which the demand has been raised and the method in which the original tax return was filed.

Once there is an acknowledgement received for the same then, it would be clear that the process of communication has reached the tax department. They should then wait for the tax department to take the necessary action and if nothing happens then they should ensure that they send a reminder once again after a certain period of time.

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