Most of us manage to get through our days without ever having to deal with the Income-Tax Department. Sometimes the small business that you are running may not be that lucky. So what do you do when the long arm of the tax department reaches out and hands you a notice?
Our advice – do not panic and do not ignore it. Find out exactly why the notice was sent to you and then carefully handle it or else you may end up paying a hefty penalty in addition to your tax payments.
Remember, receiving a notice does not mean you have committed a crime. Often notices are sent for relatively innocuous reasons like a minor error in filing a tax return or an enquiry for basic information. In such cases, submitting the requested information is enough. If the reason is not so innocuous, and the notice demands a scrutiny assessment, this means you will need to prepare yourself for a more detailed examination.
Five things to do when you receive a notice
1. Record the date and time of receipt of notice – Ensure that you record the time and date of receipt of the notice either on the notice itself or somewhere else so that later on you are able to defend yourself and substantiate that you replied to the notice on time. This is important because the time limit by which the reply needs to be filed is mentioned on the notice and usually starts from the date of service of the notice. Also preserve the envelope in which the notice was ..