The era has accepted all digital processes to be a big convenience and a time-saver. One such example is income tax records which can effortlessly be maintained by spending less or no money in the process. But, it is necessary for the taxpayer to mark the time limits for each income tax assessment before storing and filing the previous documents.
Mostly, the deadline to file an ITR of any financial year is 31 July of the following financial year (except the ones whose accounts need to be audited). For instance, the ITR for the financial year 2022-23 needs to be filed before or on 31 July 2023. On the other hand, the group that is required to be audited shall furnish the ITR by 31 October 2023.
On filing the returns, a ‘scrutiny notice’ is served to the taxpayer as per the directions under section 143 (2) of the Income Tax Act 1961. The notice can be received by the taxpayer within six months from the end of the assessment year. For Example, the Scrutiny Notice for Financial Year 2021-22 will be received before 30 September 2023. Or he may get the notice of re-assessment from the department directed under section 147 of ITA 1961.
Time Limit for Receiving Re-assessment Notice
Re-assessment notice can reach within four years of the end of the assessment year if the suspected income is less than Rs 1 lakh. However, if the income is beyond 1 Lakh, the notice will be served within 6 years from the end of the assessment year.
This means that the taxpayer’s earnings are under the cloud of accusation by the I-T Department for seven consecutive years from the end of a particular assessment year. Hence, 7 years is the standard record-maintaining time for a taxpayer.
Important: All About Income Tax Scrutiny Notice & How to Respond Fast?
If we talk about taxable foreign assets, the re-assessment notice may reach the doors within 16 years from the end of a particular assessment year. While scrutinizing the documents, if the department finds an alleged amount of 50 Lakhs or more, then the re-assessment notice can reach the taxpayer between the seventh and tenth assessment year.
Previously saved records are of great help when you are dealing with Long Term Capital Gains (LTCG) tax. While introducing long-term capital gains tax (LTCG) on stocks and mutual funds, you will need these records. People often find themselves stuck in uncertain notices from old assessments.
