Received Notice For Income Tax Refund Claims? Here’s What You Should Do
The deadline to file Income Tax Return (ITR) for individual taxpayers for the Assessment Year AY 2022-2023 was July 31. The Income Tax Department is processing the Income Tax Returns and many taxpayers may end up getting notices for multiple reasons including calculation errors, not reporting income correctly or evening claiming excessive losses.
The I-T department is verifying the refunds claimed by the taxpayers towards the TDS deductions. The department is using an Artificial Intelligence (AI) enabled software to scrutiny such claims and send out notices for discrepancies.
An assessee may end up getting such a notice for claiming multiple refunds under different sections of the Income Tax Act. The taxpayer may get a mail from the I-T department asking to verify and revise the ITR if the proof of investment is missing or a wrong exemption is claimed. The notice is being sent out to the individual taxpayers with an aim to reduce the amount of refund or to revise it, the Business League website reported.
The taxpayers and small traders who have claimed exemptions under Section 80G of the Income Tax Act are getting such notices. Section 80G of the I-T Act allows exemptions for various contributions made as donations to special relief funds and charitable institutions.
The I-T Department is sending notices to salaried class for higher refunds claimed or mismatch in amounts as mentioned in their Form 16. The businessmen are getting notices for showing excess losses or wrong claims. Notices are also being sent out to taxpayers for claiming exemptions under various heads like investments under Section 80C, interest on home loans and rent paid.
Penalty for Wrong Exemption Claims
A taxpayer may end up paying a 200% penalty and additional interest on addition in assessment.
What You Should Do?
So if you are a salaried employee verify the refund claimed and match it with the deductions as mentioned in Form 16. Also, match your deductions with Form 26AS. The TDS amounts should be the same in both Form 26AS and Form 16 or 16A. If you find any missing information for TDS deductions in these Forms, ask the respective deductor to update their reports. After receiving such notice you should first collect proof of all investments and revise the ITR filing within 15 days.