Understanding the different Sections of the Income Tax Act

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Have you received an income tax notice under income tax Act recently? There is no need to panic as notices against all the different Sections of Income Tax act are not associated with equal implications.

Read on to find out the different Sections of the Income Tax Act and what they outline if you get a tax notice under that Section.

A notice under Section 131 (1A) of Income Tax Act

In case you receive an income tax notice from this Section, it means that the Assessment Officer or AO suspects that you have concealed your income and will initiate an investigation on the issue in his own regard.

There is no minimum time limit to serve this notice.

A notice under Section 142 (1) of Income Tax Act

This notice is sent as a preliminary one prior to an assessment. One may get such a notice if they have not filed their income tax return in due time or need to furnish documents or accounts to make an assessment. If your response satisfies the Assessment Officer, Then there shall be no assessment.

The minimum time limit to serve this notice is after the end of the assessment year in question.

A notice under Section 148 of Income-tax Act

This notice is issued by an AO if they think that some earnings have escaped assessment. Hence, you could be asked to file for returns against these earnings for reassessment or for assessment in the relevant assessment year.

The minimum time limit to serve this assessment can be calculated in the following way: the earning that has escaped assessment is less than INR 1 Lakh, then it can be sent within 4 years of the end of the relevant assessment year. And if the amount is exceeding INR 1 Lakh then you will receive notice within 6 years.

A notice under Section 143 (1) of Income Tax Act

This is merely a letter of intimation that tells you if you have paid the correct amount of tax or not. And if you have paid higher than the required amount or lower than that.

An Assessee can receive three types of notices:

  1. Refund notice: according to the AO’s calculations you have made excessive payments.
  2. Intimation: letter to inform that after final assessment your tax amount paid matches with the AO’s calculation.
  3. Demand: according to the AO’s calculation the amount you pay is a shortfall and will demand the remaining amount that you have to pay within 30 days of the notice.

Time limit to serve this notice is one year after the end of the fiscal year in which you file your return.

A notice under Section 143 (2) of Income Tax Act
This is just a follow-up notice against a prior notice under Section 143 (1). This means that either the Assessment officer is not satisfied with your response or he has not received the right documents sought by him. Thus, your return will scrutinize in detail.

Time limit to serve this notice is at the end of 6 months after the end of the financial year for which the return was filed.

A notice against Section 156 of income tax act

This is demand notice asking the taxpayer to pay up his dues which may be penalty, tax or fine. Moreover, it may include any other amount that the IT Department deserves from them. This notice usually reaches one after an assessment and must be served within 30 days of receiving the notice.

There is no time limit as such to service such notices.

A notice under Section 245 of income tax act

This is an intimation notice that one may receive if they had requested for a refund of a certain amount against Income Tax but did not receive it the year. And also have some dues of outstanding tax that needs to be paid. The Assessment Officer, in this case, may want to adjust this due amount with the refund owed.

There is no time limit in such instances.

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