Why do ‘defective return’ notices appear? Most individuals filing their Income Tax Return (ITR) have already received their refunds. However, some are receiving ‘defective return’ notices. But why do these notices come? And what should you do if this happens? Let’s find out now.
The tax department issues these notices when discrepancies are noticed between the income reported in Form 26AS and the income recorded in the ITR and the Annual Information Report (AIS).
Furthermore, these notices are likely to be issued when income from business and commissions is incorrectly shown as other types of income, such as rental income or capital gains.
Each type of income corresponds to a specific tax return form. Therefore, when filing your ITR, it’s crucial to choose the correct form based on your income source. This knowledge empowers you to file your taxes accurately and avoid ‘defective return’ notices.
Under Section 139(9), the tax department sends defective notices in cases of the sale of shares or if capital gains received in other ways have not been declared.
What should you do if you receive a notice? Firstly, don’t panic. Carefully examine why the notice was issued. Ensure that all incomes are entered correctly.
If there was an error in selecting the form, don’t worry. You can select the correct one and re-file the returns with the appropriate supporting documents.
In some cases, simply responding to the notice may be sufficient. The notice you receive will specify whether replying or re-filing the ITR is necessary, giving you control over the situation.
Following these steps will help you avoid issues: A discrepancy between the income stated in Form 26AS and the amount reported in the ITR regarding tax deducted at source may lead to processing issues with the returns.
In such a scenario, revised returns with corrected details need to be filed. This involves selecting the ‘Revised Return’ option in the tax filing portal and providing the corrected information.
It’s crucial to respond to the defective notice within 15 days. Failing to do so could lead to delays in your refund and potential legal action. This underscores the urgency and importance of timely action in addressing ‘defective return’ notices.