Get more information About Income Tax notice Assessment

Every assesse, who earns earnings in excess of the basic exemption limit in a Financial Year (FY), must file a statement including details of his income, deductions, and other associated details. This is called the Income Tax Return. Once you as a taxpayer file the earnings returns, the Income Tax Department will process it and will do an Income Tax Notice Assessment. There are events where, based on set criteria by the Central Board of Direct Taxes (CBDT), the return of an assesse  gets selected for an assessment.

The numerous forms of assessment are as follows:

Self  Assessment

Summary Assessment

Regular Assessment

Best Judgment  Assessment

Income Escaping Assessment

1.Self Assessment

The assesse himself figures out the earnings tax payable. The tax department has actually offered various forms for filing tax return. The assesse combines his income from various sources and adjusts the very same against losses or deductions or various exemptions if any, offered to him throughout the year. The overall income of the assesse is then come to. The assesse  lowers the TDS and Advance Tax from that total up to determine the tax payable on such earnings. Tax, if still payable by him, is called self  assessment tax and need to be paid by him before he submits his return of income. This procedure is referred to as Self Assessment.

2.Summary Assessment

It is a type of assessment with no human intervention. In this kind of assessment, the details submitted by the assesse  in his return of earnings is cross-checked versus the information that the income tax department has access to. In the process, the reasonableness and correctness of the return are validated by the department. The return gets processed online, and modification for arithmetical errors, inaccurate  claims, disallowances etc are instantly done. Example, credit for TDS declared by the taxpayer is discovered to be greater than what is available against his PAN as per department records. Making a change in this regard can increase the tax liability of the taxpayer.

After making the previously mentioned adjustments, if the assesse is needed to pay tax, he will be sent out an intimation under Section 143( 1 ). The assesse needs to react to this intimation accordingly. Here you can read a more in-depth article on Section 143( 1 ).

3. Regular Assessment

The income tax department licenses the Assessing Officer or Income Tax authority, not below the rank of an earnings tax officer, to conduct this assessment. The function is to guarantee that the assesse has neither understated his earnings or overstated any cost or loss or underpaid any tax.

The CBDT has set specific specifications based on which a taxpayer's case gets chosen for a scrutiny assessment.

a. If an assesse  goes through a scrutiny assessment, the Department will send a notice well beforehand. Nevertheless, such notification can not be served after the expiration of 6 months from the end of the Financial year, in which return is filed.

b. The assesse will be asked to produce the books of accounts, and other proof to validate the income he has specified in his return. After validating all the information available, the examining officer passes an order either verifying the return of income filed or makes additions. This raises an earnings tax demand, which the assesse should react to accordingly.

4.Best Judgement Assessment.

This assessment gets conjured up in the following situations:

a.If the assesse fails to respond to a notification issued by the department advising him to produce particular info or books of accounts

b. If he/she fails to abide by a Special Audit purchased by the Income tax authorities

c.The assesse stops working to submit the return within due date or such prolonged time limit as allowed by the CBDT

d.The assesse  stops working to abide by the terms as contained in the notice issued under Summary Assessment

After offering the assesse with an opportunity of being heard, the assessing officer passes an order based upon all the appropriate products and proof available to him. This is called Best Judgement Assessment.

5. Income Escaping Assessment.

When the examining officer has sufficient reasons to think that any taxable income has actually left assessment, he has the authority to examine or reassess the assesses income. The time limitation for issuing a notification to resume an assessment is 4 years from the end of the pertinent Assessment Year. Some scenarios where reassessment gets set off are provided listed below.

a. The assesse  has taxable income however has not yet filed his return.

b. The assesse, after filing the income tax return, is discovered to have either downplayed his earnings or declared excess allowances or deductions.

c.The assesse has stopped working to provide reports on worldwide transactions, where he is required to do so