How to Identify and Rectify Mistakes in an Income Tax Notice? Receiving an Income Tax Notice can be stressful, but errors in the notice can be rectified if pointed out correctly. Here’s how you can identify mistakes and request rectification under Section 154 of the Income Tax Act. 1. Common MistakeRead more
How to Identify and Rectify Mistakes in an Income Tax Notice?
Receiving an Income Tax Notice can be stressful, but errors in the notice can be rectified if pointed out correctly. Here’s how you can identify mistakes and request rectification under Section 154 of the Income Tax Act.
1. Common Mistakes in an Income Tax Notice
🔹 Mismatch in Income Details – The income mentioned in the notice may not match your ITR filing.
🔹 Incorrect Tax Calculation – Errors in tax liability computation, deductions, or rebates.
🔹 TDS Mismatch – TDS credit not given as per Form 26AS.
🔹 Incorrect Demand Raised – Wrong tax demand due to an automated system error.
🔹 Penalty or Late Fee Error – Unjustified penalties applied.
🔹 Arithmetical or Clerical Mistakes – Typing errors in PAN, name, or assessment year.
2. How to Verify the Mistake?
✔ Check Your ITR Acknowledgment – Compare details with the notice.
✔ Download Form 26AS & AIS – Cross-check TDS/TCS details and reported income.
✔ Refer to Intimation u/s 143(1) – Verify whether the calculations are correct.
✔ Match Deductions & Exemptions – Ensure all eligible deductions (e.g., 80C, 80D, 80G) are considered.
3. How to Rectify the Mistake?
✅ Step 1: Login to the Income Tax e-Filing Portal (https://www.incometax.gov.in)
✅ Step 2: Go to ‘Rectification Request’ under ‘Services’ section.
✅ Step 3: Select ‘Section 154 – Rectification’ and enter the details.
✅ Step 4: Upload Supporting Documents (ITR acknowledgment, Form 26AS, Tax Challans, etc.).
✅ Step 5: Submit the Request and Track Status
📌 If the mistake is on the department’s end, the rectified order will be issued within a few weeks.
4. What If the Error is Not Rectified?
🔴 If the mistake is not rectified, you can:
- File a Grievance through the e-filing portal.
- Submit a written application to the Jurisdictional Assessing Officer (AO).
- File an Appeal before the CIT(A) under Section 246A (if demand is incorrect).
CA Vishnu Ram
Who is Required to Furnish Annual Information Return (AIR) Under Section 285BA of the Income Tax Act? Section 285BA of the Income Tax Act, 1961 mandates the filing of Annual Information Return (AIR), now referred to as the Statement of Financial Transactions (SFT). Certain specified entities are reqRead more
Who is Required to Furnish Annual Information Return (AIR) Under Section 285BA of the Income Tax Act?
Section 285BA of the Income Tax Act, 1961 mandates the filing of Annual Information Return (AIR), now referred to as the Statement of Financial Transactions (SFT). Certain specified entities are required to report high-value transactions to the Income Tax Department.
1. Who is Required to Furnish AIR/SFT?
The following specified persons/entities must file AIR/SFT if they conduct transactions exceeding prescribed limits:
2. When & How to File AIR/SFT?
✔️ Due Date: May 31 of the following financial year.
✔️ Mode of Filing: Electronically through Form 61A.
✔️ Details Required: PAN of transacting persons, transaction details, and value.
3. What Happens if AIR/SFT is Not Filed?
🔴 Penalty under Section 271FA – ₹500 per day for late filing.
🔴 Higher penalty of ₹1,000 per day if notice is issued by the Income Tax Department.
🔴 Possible scrutiny or inquiry notices if high-value transactions are unreported.
4. How Does the Income Tax Department Use This Data?
✔️ Cross-verifies transactions with ITR filings.
✔️ Identifies tax evasion and undisclosed income.
✔️ Tracks PAN-linked high-value transactions for scrutiny.
Final Thought
If you are a business or entity covered under Section 285BA, ensure timely compliance with AIR/SFT filing to avoid penalties and scrutiny.
Read: What are the financial transactions covered in annual information return?
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