How to Respond to Sections 139(9), 154, and 156 Without Errors
- Farheen Mukadam
- Aug 21
- 10 min read
Responding to tax notices can be a stressful and complicated process for many taxpayers, especially if they receive notices under sections like 139(9), 154, or 156 of the Income Tax Act. These notices may concern issues such as defective returns, rectification of mistakes, or demands for additional taxes. Understanding these notices and how to properly respond is crucial to avoiding penalties and ensuring compliance with the tax regulations. Let us explore how to handle these notices and how TaxBuddy simplifies the entire process, ensuring that you can respond quickly, accurately, and with minimal hassle.
Table of Contents
Responding to Section 139(9) – Defective Return Notice
Section 139(9) of the Income Tax Act addresses the issue of defective returns. If the Income Tax Department identifies discrepancies or missing information in your filed Income Tax Return (ITR), you will receive a notice under Section 139(9), indicating that your return is defective. The department sends this notice when it finds that your return does not comply with the provisions of the Income Tax Act. It is crucial to respond to such a notice promptly to avoid penalties, further complications, or even the rejection of your return.
Reasons for Receiving a Section 139(9) Notice:
Several factors can lead to receiving a defective return notice. The most common reasons include:
Missing Mandatory Fields: Each ITR form has specific fields that need to be filled out. If any mandatory field, such as details about your income, deductions, or tax payments, is left blank or incorrectly filled, the Income Tax Department may flag the return as defective.
Incorrect Information: Inaccurate information, such as discrepancies between reported income and Form 16, mismatch of TDS details, or incorrect bank account details, can lead to a defective return notice. The Income Tax Department cross-verifies your return with various sources of information, such as the TDS records, bank statements, and employer declarations, to ensure consistency.
Incomplete or Missing Attachments: Sometimes, taxpayers forget to attach necessary documents such as Form 16, proof of deductions, or the Tax Deducted at Source (TDS) certificates. If these documents are not uploaded or linked correctly, your return may be deemed defective.
Mismatch Between Reported and Actual TDS: If the TDS reported on your return does not match the details available in the tax records, the department might consider the return defective. This could be due to delays in TDS credit being updated or errors made by your employer or tax deductor.
Invalid Claims or Deductions: If you claim deductions or exemptions that do not meet the eligibility criteria or have not been supported with the correct documentation, the return may be flagged as defective.
Steps to Respond to a Section 139(9) Notice:
Once you receive a Section 139(9) notice, it is essential to act quickly and correctly to avoid penalties or complications. Here are the steps to follow:
Understand the Issue: The notice will specify the errors or missing information that led to the defective return. Carefully read the notice and understand the issues raised. This will typically include details about the missing fields, incorrect information, or required attachments.
Access the Notice on the Income Tax Portal: You can access the notice by logging into your account on the Income Tax Department’s e-filing portal. Go to the "Compliance" section and select "Defective Return Notice" to view the details.
Rectify the Errors or Provide the Missing Information: After reviewing the notice, you need to correct the discrepancies in your return. This could involve providing missing information such as income details, correcting TDS details, or submitting any required attachments like Form 16. If there are discrepancies in your income details, you should ensure they are corrected with the correct documentation before resubmitting.
File a Revised Return (ITR-1, ITR-2, etc.): Once you have corrected the mistakes, you will need to file a revised return. A revised return allows you to amend the initial return and provide the correct information. You will need to choose the option "Revised Return" while filing the ITR and provide the original acknowledgment number of the defective return. If you're using TaxBuddy, the platform will guide you through this process, ensuring all errors are corrected before you resubmit your return.
Check for Acknowledgment: After submitting the revised return, the Income Tax Department will issue an acknowledgment. You should check for this acknowledgment to ensure that your revised return has been accepted. If you don’t receive an acknowledgment within the prescribed time frame, you may need to follow up with the tax authorities.
Meet the Deadline: The Income Tax Department typically provides a specific time frame (usually 15-30 days) to rectify the errors and file the revised return. Failing to file the revised return within the given time can lead to penalties, or the department may reject the return, requiring you to file a fresh one, potentially with additional penalties.
Why Timely Filing and Rectification is Crucial:
It’s essential to respond to a Section 139(9) notice within the given time frame because:
Avoiding Penalties: If you fail to correct the errors and submit a revised return within the prescribed time, you may incur penalties under the Income Tax Act. Penalties may also be imposed if the Department determines that the errors were due to willful neglect or incorrect reporting.
Preventing Rejection of Your Return: If you do not respond to the defective return notice or fail to rectify the issues, your return could be rejected. In this case, you will have to file a fresh return, which may lead to additional scrutiny or complications.
Avoiding Delays in Refund Processing: If your return is deemed defective and not corrected, it could delay the processing of your refund. The Income Tax Department processes refunds only after your return has been accepted, and unresolved issues could push your refund to a later date.
Compliance and Legal Requirements: Timely filing and correction of your return ensures compliance with tax laws. The more you delay or fail to respond, the higher the risk of facing legal consequences, including notices or audits from the tax authorities.
How to Handle Section 154 – Rectification of Mistake Notice
Section 154 of the Income Tax Act deals with the rectification of mistakes in the return after it has been processed by the Income Tax Department. If the Department identifies any clerical or computational errors in your filed return, such as incorrect TDS credit or mismatched income details, you may receive a notice under Section 154.
To handle a Section 154 notice, you must correct the mistakes identified by the Department and submit a rectified return. This process typically involves updating the incorrect details and submitting the revised return electronically. Taxpayers can also request for an adjustment of the mistakes to be made directly through the online portal.
TaxBuddy can help streamline this process by automatically identifying common errors in your filed returns and allowing for an easy rectification submission. This helps save time and ensures that you don’t miss any important details during the process.
Navigating Section 156 – Notice of Demand
Section 156 of the Income Tax Act pertains to a Notice of Demand issued when the Income Tax Department determines that additional taxes are due after reviewing your filed return. This notice typically arises when the tax payable is higher than what has already been paid through TDS, advance tax, or self-assessment tax. The notice will provide the amount of tax due, along with the deadline for payment.
When you receive a Section 156 notice, it's important to take immediate action. The first step is to verify the correctness of the demand. You can check for errors such as incorrect calculations or missed payments. If the demand is valid, you should make the payment by the due date to avoid interest or penalties.
TaxBuddy simplifies this process by providing detailed instructions for reviewing the notice and understanding the payment process. Additionally, the platform helps calculate the amount of tax due and assists in filing the payment directly through the tax department’s online portal.
How TaxBuddy Simplifies Response to Tax Notices
TaxBuddy takes the stress out of dealing with tax notices by providing a simple, easy-to-follow process for responding to notices under Sections 139(9), 154, and 156. The platform helps identify the type of notice, guides you step-by-step in correcting any issues, and helps with submitting the necessary rectifications or payments.
For Section 139(9), TaxBuddy ensures your return is fully compliant and assists you in filing a revised return correctly. In the case of Section 154, the platform identifies errors and offers solutions to rectify them quickly. And for Section 156 notices, TaxBuddy walks you through verifying the demand and making the payment.
TaxBuddy also provides continuous post-filing support, offering expert assistance if needed. The platform’s user-friendly interface and AI-driven insights make navigating complex tax notices a breeze, allowing you to stay on top of your filings and avoid penalties.
Conclusion
Dealing with tax notices can be a daunting task, but understanding how to respond to Section 139(9), 154, and 156 notices is essential for staying compliant and avoiding penalties. With the right approach and tools, such as those offered by TaxBuddy, taxpayers can quickly rectify mistakes, respond to demands, and ensure that their tax returns are accurate. TaxBuddy simplifies the entire process, ensuring that all necessary corrections are made efficiently and without stress, saving both time and money.
For anyone seeking help in managing tax notices or filing corrections, it is highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
Frequently Asked Questions (FAQs)
Q1: How do I know if my return is defective under Section 139(9)?
A defective return under Section 139(9) is one that contains discrepancies, missing information, or incorrect details. If your return is found to be defective, the Income Tax Department will issue a notice specifying the reasons for the defect. Common issues include incomplete information, mismatched PAN details, incorrect TDS credits, or unreported income. If your return is rejected, it’s important to rectify these discrepancies and resubmit the corrected return.
Q2: Can I rectify mistakes under Section 154 on my own?
Yes, you can rectify mistakes under Section 154 on your own through the Income Tax Department’s online portal. Section 154 allows taxpayers to correct errors in their filed returns. These errors may include incorrect income, deductions, or taxes paid. TaxBuddy simplifies this process by helping you identify common mistakes, offering a clear guide to make corrections, and submitting the revised return with ease.
Q3: What should I do if I receive a Section 156 notice?
A Section 156 notice is issued when the Income Tax Department demands payment of any tax, interest, penalty, or other charges. If you receive this notice, verify the tax demand to ensure there are no errors or discrepancies. If the demand is valid, make the payment by the due date to avoid penalties. If there are discrepancies, you can challenge the demand. TaxBuddy assists you in reviewing your tax demand and offers solutions to address any errors, such as filing a revised return or appealing the demand.
Q4: How can I avoid getting a defective return notice in the future?
To avoid receiving a defective return notice, it is essential to file your return accurately. Platforms like TaxBuddy use AI-driven tools to check for common filing errors before submission. These tools help verify your TDS credits, income details, and tax calculations, ensuring that your return complies with all necessary requirements. By filing correctly and double-checking all details, you reduce the chances of receiving a defective return notice.
Q5: Can TaxBuddy help me with rectifying my ITR after I’ve filed it?
Yes, TaxBuddy provides a simple process for rectifying your ITR after filing it. If you realize there’s an error or you receive a notice for a mistake, TaxBuddy helps you file a revised return under Section 154. The platform guides you through identifying the issue, making the necessary corrections, and resubmitting the corrected return to the Income Tax Department.
Q6: How does TaxBuddy assist with TDS credit verification?
TaxBuddy automatically checks your TDS entries and matches them with the records provided by your employer or other deductors. This helps ensure that the TDS reflected in your return is accurate. If there’s a mismatch or if TDS credits are missing, TaxBuddy alerts you, reducing the chances of delays or rejections in the refund process. This feature ensures your return is filed correctly and speeds up the refund process.
Q7: What happens if I don’t respond to a tax notice?
Failing to respond to a tax notice can result in serious consequences, including penalties, interest charges, and legal action in extreme cases. The Income Tax Department may take further action to recover the owed amount, including sending recovery notices or initiating proceedings. It is crucial to act quickly and respond to any tax notices you receive to avoid additional costs and complications. TaxBuddy helps simplify this process by providing clear instructions and options for responding to notices.
Q8: How can TaxBuddy simplify my response to tax notices?
TaxBuddy offers comprehensive assistance with responding to tax notices. The platform provides step-by-step guidance for understanding the notice, reviewing the tax demand or issue, and taking appropriate action. Whether it involves filing a revised return, paying the demanded amount, or challenging the notice, TaxBuddy ensures that the process is easy to follow and that you are in full compliance with the Income Tax Department’s requirements.
Q9: Is it possible to challenge the tax demand in a Section 156 notice?
Yes, if you believe the tax demand under a Section 156 notice is incorrect, you can challenge it. The Income Tax Act allows taxpayers to appeal against the demand by filing an appeal with the appropriate tax authorities. TaxBuddy assists you in reviewing the demand and understanding the steps involved in filing an appeal. Whether it’s an error in the tax calculation or another issue, TaxBuddy provides support in challenging the demand.
Q10: How do I make sure I’m not penalized for mistakes in my filing?
To avoid penalties, ensure that your tax return is filed accurately and on time. Using platforms like TaxBuddy can help minimize the chances of errors, as the platform performs error checks and provides expert guidance before submission. Filing on time also ensures that you avoid late fees or penalties. If any issues arise, TaxBuddy’s support team can help resolve them before they lead to penalties.
Q11: Can I file a corrected return after I’ve received a Section 154 notice?
Yes, you can file a corrected return after receiving a Section 154 notice, which relates to correcting mistakes in a filed return. Taxpayers have the option to submit a revised return under Section 154 to correct errors identified by the Income Tax Department. TaxBuddy simplifies this process by guiding you through the correction steps, ensuring that the amended return is filed correctly and promptly.
Q12: What is the benefit of using TaxBuddy to respond to tax notices?
TaxBuddy simplifies the response process for tax notices by providing easy-to-understand guidance and tools. The platform helps you navigate through complex notices, whether it involves revising a return, paying taxes, or responding to additional requests from the Income Tax Department. By using TaxBuddy, you ensure that all your actions are in compliance, and you avoid delays or penalties, making the entire process smoother and less stressful.
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