“Non Filing of Income Tax Return – Reg.” notice and Eye-opening Reality of Information Gathering by IT Department

Recently, the Income Tax Department (ITD) has become very aggressive in widening the tax base through identification of stop-filers and non-filers by issuing notices to  persons who it thinks may have filed the return. The notice would say,

 ”The Income Tax Department has received information on financial transactions / activities relating to you. A list of some of the information for Financial Year is provided below. As per records, you do not appear to have filed Income Tax Return for Assessment Years. “ 

It would then require to login to his/her e-filing portal and furnish the response in the Compliance Module. Then, the person would also be required to print the acknowledgement of response submitted and send a copy to the jurisdiction ITO (Income Tax Officer) within certain days.

Most of tax payers think that the Income Tax Department knows only the transactions that are reflected in their Form 26AS i.e. AIR (Annual Information Report) information and tax information like TDS, Advance Tax, refund, etc. Unfortunately, that is not correct. While AIR is the widely known source, the main source of the information gathering is done through CIB (Central Information Branch).

CIB: 
In 1975, the Income Tax Department formed the Central Information Branch (CIB) for strengthening tax data-base. Since August 2011, to conform to new norms regarding exchange of information and greater transparency by the financial institutions, Directorate of Income Tax (Intelligence & Criminal Investigation) was setup under a DGIT which included the erst while intelligence set up and CIB setup.

CIB report would include information relating to financial transactions like investment, expenses, payment of taxes, etc and details of persons who are involved in some specified activities.

Information Codes and Description:
Following is the list of major information codes and description which may be included in the notice. It will be a good eye opening for a lot of tax payers in India that the ITD is collecting all these information, especially no. 12, 15, 19 and securities transactions. Please note this is only indicative list and includes only major codes. 

No. Code Information Description
1 AIR-001 Cash deposits aggregating to Rs. 10,00,000 or more in a year in any savings account
2 AIR-002 Paid Rs. 2,00,000 or more against credit card bills
3 AIR-003 Investment of Rs. 2,00,000 or more in Mutual Fund
4 AIR-004 Investment of Rs. 5,00,000 or more in Bonds or Debenture
5 AIR-005 Investment of Rs. 1,00,000 or more for acquiring shares
6 AIR-006 Purchase of Immovable Property valued at Rs. 30,00,000 or more.
7 AIR-007 Investment in RBI Bond of Rs. 5,00,000 or more
8 CIB-094 Sale of Motor Vehicle
9 CIB-151 Transfer of immovable property
10 CIB-154 Transfer of capital assets where value declared for the purpose of stamp duty is more than sale value.
11 CIB-157 Purchase of Immovable property valued at Rs. 5 lakhs or more
12 CIB-183 Time deposit of Rs 1,00,000
13 CIB-185 Purchase of Bank Draft of more than Rs. 50,000 in cash
14 CIB-321 Share Transactions more than Rs. 20,000
15 CIB-403 Investment in Fixed Deposit/Time Deposit exceeding Rs. 2,00,000
16 CIB-406 Payment made against Credit Card more than Rs 2,00,000
17 CIB-410 Cash deposit aggregating of Rs. 2,00,000 on a day
18 CIB-502 Contract of Rs. 10,00,000 or more in the Commodities Exchange
19 CIB-514 Interest paid by co operative credit Society
20 CIB Payment in connection with foreign travel amount exceeding Rs. 1,00,000 at one time
21 CIB Payment to Hotel and Restaurants exceeding Rs. 1,00,000 at one time
22 EXC-002 Turnover from services reported in Service Tax Return
23 FRM-15CA Remittance to a non-resident or to a foreigh company (Form 15CA)
24 STT-01 Purchase of equity share in a recognized stock exchange
25 STT-02 Sale of equity Share (settled by actual delivery or transfer) in a recognized stock exchange
26 STT-03 Sale of equity Share (settled by otherwise than by the actual delivery or transfer) in a recognized stock exchange.
27 STT-04 Sale of option in securities (derivative) in a recognized stock exchange
28 STT-05 Sale of Futures (derivative) in a recognized stock exchange.
29 TDS-92B TDS Return – Salary to Employees (section 192)
30 TDS-94A TDS Return – Interest other than interest on security (section 194A)
31 Any Tax paid / TDS deducted

What to Do?

  1. DO NOT IGNORE such notice
  2. Contact your CA or us for understanding the requirement/implications
  3. Complete the steps as mentioned in the notice

About Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)

Mr. Jigar specializes on NRI Investments and Taxation. He is proud to be one of only 21 CFA Charterholders in India working as consultants. (In 2011, when he became CFA Charterholder, out of 97,173 CFA Charterholders in the World, only 697 Charterholders were in India and only 3% work as consultant; Source: www.newcfa.org). He received his MBA (Finance) from University of Illinois, Chicago, USA, CPA from USA and a Chartered Accountant from India. Jigar has over 15 years of professional experience including more than 4 years with KPMG USA’s Risk Advisory Services. Currently, he provides Wealth Management and taxation consulting serving clients from USA, UK, Americas, Europe, Middle East, Asia, Africa, Australia and India.
This entry was posted in Income Tax, NRI Investments, NRI Taxation, RBI / FEMA / Other Updates - Analyzed and tagged , , , , , , , , , , , , , , , . Bookmark the permalink.

61 Responses to “Non Filing of Income Tax Return – Reg.” notice and Eye-opening Reality of Information Gathering by IT Department

  1. M M PATEL says:

    Pl give me guidance about response to comply e-verification for non-filing of return.

    1) Is there any time limit to respond for e-verification issue for non-filing of return ?

    2) In drop down menu for non-filing of return, suppose one opt : ITR has not been filed then give Reason: Return under preparation, then can I able to file return for AY 2016-17 throgh e-filing portal ? can one opt for physical IT return filing ?

    3) For Related information for NIN01 type, suppose one opt: AWARE OF THIS INFORMATION, then do I need to reply “DETAILED RESPONSE” as per sample TEMPLATE with A1 to A8 details ?

    4) what is time limit to file OLD (AY 2016-17) IT RETURN filing ?

    5) what is time limit to file DETAILED RESPONSE under AWARE OF THIS INFORMATION ?

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. If the time limit is not specified, you would need to respond within a reasonable time. I would think 30 days would be a reasonable time.
      2. Unfortunately,you won’t be able to file the AY 16-17 return electronically. You would need to contact your Assessing Officer for the same.
      3. Yes, ifyou are aware of the transaction, you would need to explain the source of funds and provide the details. The total of A1 to A8 should match with the amount.
      4. The last date of filing AY16-17 return was March 31, 2018.
      5. I would think the same as #1 as both needs to be submitted on the same portal “reasonable”. Thanks.

  2. Jai says:

    Hello Sir

    Thanks for the useful information on your site.
    - I traded in equities and commodities and I had not filed ITR for FY-2015-16 as total income was below taxable limit.
    - I have received an SMS from IT department for compliance regarding my PAN. On logging in on their site I found information under CIB-502 with turnover detail and transaction dates.
    - I selected the option ‘Not filed return as income was below taxable limit’ but in addition to this one has to submit response to the e-verification information details.
    - Though I have traded on the commodities exchange but the transaction details like turnover and dates do not match with my broker statements so should I choose ‘Not aware of this information’ or am I missing something?

    thanks in advance, I hope your response to my queries will be useful to other visitors also on your site.
    Jai

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      the amount in the transaction detail would be notional and not the net amount. So please check with the broker and reply accordingly. Thanks.

  3. Pankaj Masurkar says:

    Resp Sir,
    I have received letter for compliance for AY 2015-16 Subject being ” Non Filing of Income Tax Return – Reg “. There is a tax liability on short term capital gains arising from sale of immovable property. However I have not filed ITR for the said AY. Can I file the same now? If yes under which section?

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      The deadline for filing tax return for A.Y. 2015-16 has passed. You can only file the tax return only if a notice is issued requiring you to file your tax return. Thanks.

  4. Jeyashree says:

    Sir.. I received a notice from income tax department that is return of income u/s -139(1) of the IT act not furnishing of return of income for the accessment year 2016 to 2017. How to solve this problem and give a solution . Thanking you

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      Please check whether you were required to file the tax return, i.e. if you have income more than Rs. 250,000. If no, you may reply that you did not file the tax return as your income was below taxable. If yes, please contact your CA or us for filing the tax return. Please note that the deadline for filing income tax return for FY 2016-17 is March 31, 2018. Thanks.

  5. Chand says:

    I got a non filing return notice code CIB-094 Sale of Motor Vehicle. Kindly inform which clause to be taken for compliance. Is it self income or expenditure or investment.The car is purchased and used for my personal use only am a salaried person. Thanks

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      Only if your income, including any gain on sale of motor, is more than basic exemption limit, you are required to file the tax return. If not, please reply accordingly in the income tax website in the compliance section. Thanks.

  6. Guru says:

    Dear jigar,i got a notice from IT deparment regarding “AIR-0002″ or paid 2,00,000 lakhs more than credit card bills.How to resolve this issue.please need help from your side.

  7. suni says:

    Dear Sir,
    I have received a letter from income tax department to submit the return for assessment year 2013-14. I am an NRE and I dont have any income in India. I am not sure why income tax department are saying to file the return and what basis they are saying this.
    I have checked my NRE and NRO account. I dont have any income but normally i have done transfers from NRE to NRO account.
    I spoke to the Auditor he said to submit the ITR form 1 declaring no income and upload the letter received from income tax and also he advised me to upload the account transactions for the year 2012-13( is the tax year Jan to DEC?) for the assessment year 2013-14 and asked me to upload the statement online in e-filing website.
    Please kindly help with the same. Is it right way of doing.
    Also I would like to get information from income tax department on what basis and what income they are saying this. How can I get this information, does e-filing ITR 1 and sending letter online will help me to get the information.
    I have called income tax department but no luck.

    Please kindly help.

    thanks
    Suni

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. The tax year in India is April – March. In your case, the financial year would be April 2012- March 2013.
      2. You may ask the IT department the basis for the notice. Usually, they give the reason for the same. I am not sure why it is not included in the notice. I request you talk to your CA and file return or communicate to the IT Officer through your CA. Calling may not work. Thanks.

  8. vyomesh shah says:

    Dear Jigarji,
    Thank you very much for your reply,
    As I am nri and my resident father wish to transfer his property as gift to me , please let me know is there any liability of gift tax on me or on my father ,and if so what shall be rate of gift tax.

    Thanking You
    Sincerely Yours

    vyomesh shah

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. There is no gift tax in India; however, you would need to prepare a gift deed and register the same and pay the stamp duty to make it official.
      2. You would also need to check the gift tax laws of your country of residence. Thanks.

  9. murugan says:

    Sir,

    I get notice code CIB-502-contract of Rs.10,00,000/-0r m0re in commodities exchange.

    This refers to any share business?
    or something else.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      This is not related to shares trading but trading in commodities e.g. any derivative trading in commodities. Thanks.

      • TVRAO says:

        Sir,

        I get notice code CIB-502-contract of Rs.10,00,000/-0r m0re in commodities exchange.

        I do trade in equity derivatives on regular basis but never did any trade in commodities and unaware of such transaction.
        what to do in this case
        can i file my response under unaware

        regards
        tvrao

        • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

          I would recommend contacting your CA for the same. You may have done some commodity derivatives trading. Also, the 10L in derivative trading is a small amount as this would be the notional amount and the notional amount is usually very higher in derivatives. Please talk to your broker and your CA. Thanks.

  10. salahuddinAtique says:

    Hi,
    kindly help as i got a notice from IT mentioning AIR 001 and EXC 001 for the year 2013-2014 respectively. i sell my ancestral property and deposited the amount in one of the savings account for that i got a notice. please tell me which option should i select under compliance tab.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      If you deposit more than 10L, you are sure to get a notice. I would assume that you had reported the sale proceeds of the property as income. Please contact your CA. Thanks.

  11. Mohan says:

    I have received notice under section 143(2) for complete scrutiny under CASS. I have been asked to submit information before 22/07/2017. Please inform what information I should submit, since they have not mentioned any reason for scrutiny. I have explanation for the investments in mutual funds and exempted income shown in my return. I had done trading in derivatives of turnover 3 lakhs and shown loss under short term capital gains instead of business income, since it was done only for hedging and I am a salaried person. Please advise what I should do.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      I suggest you to contact your CA and reply the notice. If no information is requested, you may contact your IT officer and ask to provide you the list of requested documents / information. Thanks.

  12. JIGNESH says:

    Dear jigar bhai,
    I am in gulf from Jan-2014. hence from 2014-15 ITR not filled. I filled till 2013-14.
    I am using mostly my credit card in india during vacation and for online shopping and for air tickets etc..
    I paid most of credit card bills through NRE account, some from NRO account.
    I got notice mentioning income tax not filled from 2014-15 and code air-002.
    Can you please suggest me which option I should select to reply online ?
    Also need your advice to know that indian credit card can be used by NRI ? And if yes, through which account I should pay credit card bill ?
    Dear, advance thanks for your valuable reply.
    Jignesh dhangadhria

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      As long as it is your tax paid money, nothing to worry. If your taxable income in India is less than 2.5L, you are not required to file the tax return. Please check your income and reply accordingly. Please reply as unless you reply, you would get reminder notices and may get a notice asking you to file tax return. Thanks.

  13. A.Mukherjee says:

    Sir, my mother files her nil return every FY.She e-filled her ITR for AY2015-16 which was received at CPC with acknowledgement & after that order 143(1) was sent which conforms the self assessment. Now on 05.05.2017 she received a letter of Non-filling of ITR AY 2015-16. & a AIR 001 added to it from regional A.O. asking to furnish response through e-compliance module & to send the acknowledgement no. to the A.O. within 20days. But compliance module is not working as the assessment is complete. What to do now?

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. If she has no income, how can she deposit more than 10L in a saving account. Please check whether she has deposited such high amount and determine the source.
      2. I am not sure why the compliance module is not working.
      3. Please check with your CA and contact the regional AO if compliance module is not working. Thanks.

  14. pradnya says:

    hello Jigar,

    we husband wifes are NRIs staying un UAE and have rented our jointly owned apartment {home loan taken on it} in Pune since last year but in the whole financial year it was rented twice 6 months for 19k and 2 months for 20k. as we deal in equitys we need to file ITR2. while declaring in HP schedule in ITR2 I have following questions.
    1. for the total 8 months of rental in a FY should I show the total rent received in 8 months combined or I need to declare each tenant and the rent seperately?
    2. while filling the name of tenants how do i show the tenants/rent for first 6 months and tenants/rent for the past 2 months?
    3. if its to be shown seperately how Do we fill it in the ITR2. Do I ned to fill the same property info twice with the rental income for each tenant?

    Thanks for your advice.
    Pradnya

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. As tenant information is to be included in your tax return, I would think that you would need to show the income separately.
      2. Yes.
      3. Yes. Thanks.

  15. vyomesh shah says:

    Dear Jigarji,
    I will appreciate if you kindly let me know the following,
    I am NRI and my father is resident Indian he has house in India and he has rental income out of it. Now he wants to transfer this property to me hence I will be collecting rental income
    1 Can I deposit this rental income in my NRO account?
    2 What shall be the tax implications and what shall be rate of income tax
    3 who is responsible for paying the income tax whether myself or my tenant
    4 Have I to give my pan card to my tenant so that he can deduct tax and deposit with income tax. Please let me the complete details.

    Thanking You,
    Sincerely Yours
    vyomesh shah

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. Please note that the proper documentation for transfer of property is done and stamp duty is paid. Only after stamp duty is paid and your name is entered, it is considered as your property. Also, you may have to report the property received as gift in your tax return.
      2. Once, property is transferred officially, you are allowed to take rent and credit the same to your NRO account.
      3. The legal owner of the property will include the income in his tax return and pay income tax at applicable rates.
      4. As you are an NRI, your tenant would be required to deduct TDS @ 30.9%. If property is of your father, tenant will deduct TDS @ 10% if rent is more than 180000. However, the tax liability is on you so the person receiving rent would include the rent income in his income tax return and would pay additional tax or ask for refund if TDS deducted at higher rate.
      5. Without PAN, tenant will now know in whose name TDS is to be deducted. However, before receiving rent in your name, make sure you own the property.
      6. Your father is not allowed to just gift rent income without the property just to reduce his tax liability as it may be considered as tax evasion. Thanks.

  16. Vipin says:

    Hi,
    Question regarding filing old returns. After logging into E-filing I noticed under the “Prepare and Submit Returns” section I can select older years (like AY 2015-16, 2014-15 etc) and proceed to prepare and submit returns using ITR-1 in e-filing after logging in. Should this mean I can submit them as well? From what I can see it looks possible as I was able to enter the details on the specific form for the selected year (e.g AY 2015-16).

    This is contrary to what I have read on forums before. Hence checking.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      While you may try, I don’t think you would be able to submit the same. Thanks.

  17. Vipin says:

    **VERY URGENT Query regarding**: Delayed response to “Compliance of Non-filers Notification” for FY 2014-15 (AY 2015-16) – **YET TO RESPOND***
    ===========================================================================
    Hello,

    I would need to clarify something URGENTLY regarding an IT E-filing compliance notice received by my mother (senior citizen) via EMAIL for FY-2014-15. Two emails received, ONE in Dec-16 and SECOND Jan-17 this year. Unfortunately we didn’t see the email *UNTIL 3 DAYS BACK* as mother was in hospital for over a month and subsequent issues she wasn’t checking emails.

    *Summary of Email Notification*
    ——————————————–

    *As per our records, it is observed that you have not filed your Income Tax Return for Assessment Year 2015-16. Please submit your online response as under*

    Also, in E-filing, the following entry found under the “View Information summary” tab:

    *CIB-401 SALE OF IMMOVABLE PROPERTY OF RS. 5,00,000/- OR MORE (VALUE ASSESSSED FOR STAMP DUTY)*

    **First of all a Clarification**: VALUE ASSESSSED FOR STAMP DUTY- means value of land as per the registered Sale deed based on which Stamp duty was paid. Hope my understanding here is correct?

    **Some basic info regarding the Assesse**: My mother is a pensioner whose income always comes under exemption limit and hence, though, she has PAN she has never had to pay taxes or filed any returns so far. It is the first time she has had compliance notification regarding IMMOVABLE PROPERTY. Previously there was some compliance notification about cash deposit in Bank for two financial years, one of which was responded to as non-taxable and another one as “Require More information” and there was no further communication so far on that.

    **Regarding the current email notification** – As the date for return filing for FY 2014-15 has passed (31-Mar-17), I wanted to find out what is the best way to Submit a suitable response at the earliest.

    Unfortunately we have NOT BEEN able to determine YET (in the 3 days after the email came to our notice) if there were co-relating property sale transactions during the FY 2014-15 with cumulative value of >=5 Lakhs (i.e. value of land as per the registered Sale deed based on which which Stamp duty was paid) as per the notice and if so whether any Short term/Long term Capital gains apply.

    My initial guess is there wouldn’t be property sales of value >=5 lakhs during FY 2014-15 and if there was, there wouldn’t be much gains to be reported, but this needs to be verified.

    Essentially, we are not sure if there is tax liability at this stage without checking and verifying all the details.

    So, based on my understanding, the options to respond to this are:

    1. Given the EMAIL was actually sent about 3 Months back, and the Mar-31 deadline for FY-14-15 filing is over, would it be prudent to provide a first response immediately, asking for more info on Property transaction (also mentioning hospitalisation and old age for delayed response)?

    OR

    2. Is it better to ascertain if there were any transactions meeting the criteria stated in the notification and then pay any dues, if applicable, and then respond accordingly.

    OR

    3. If through verification, no co-related transactions can be found >=5 Lakhs then respond with “Require More information” (for e.g. we find a property sale for 2 lakhs only)

    Options 2 & 3 may take some more time, may be a couple of weeks, to establish as verification is proving to be time taking due to misplaced records.

    **KEY QUESTION** – Given the situation and all the facts above, what would be the most advisable way to respond to this notification.

    ***Please provide your most valuable advice at the very earliest***

    Thanking you in advance.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      I would suggest you to contact your CA and your Assessing Officer and resolve the matter. Thanks.

  18. Prathamesh says:

    Dear Jigar,

    Its good to read through such a big Taxation knowledge base that you have created on your blog.

    I am an NRI for past 15 years and since I did not have any income in India never filed returns. Last year first time as a NRI I filed returns for AY 2016-17 & AY 2015-16 but after the due date of 31st July 2016 to claim refund of some NRO interest TDS.
    I had taken help from a CA for same. I was looking at the ITR2 for AY 2017-2018 this year and saw a column asking for all bank details. do I need to mention all NRE/NRO accounts as well as PIS account that I use for equity investments? I just checked my last 2 returns and my CA had filled only my NRO accounts and did not fill the NRE accounts which I had given him. when I checked with him after seeing it now, he said no need for mentioning NRE account as its income is Tax excempt for NRIs and only mention the NRO accounts as the TDS deducted needs to be claimed from them..
    1. Just wanted to confirm is that the case?
    2. If not will this create any issues for the previous ITRs. what is the solution in case I need to add the NRE accounts as I have already received the refunds also for both returns which I had filed after the due date.?
    3. I am planning to mention both NRE/NRO in the latest ITR for AY 2017-18. will that be good enough?
    4. this FY my NRE FDS have matured after 4 years. do I need to show them in the returns if they are tax exempt?
    5. I am filing ITR2 where there is the asset & liability declaration if income is above 50 lakhs. this 50 lakhs is taxable income in India or also includes exempt income like India equities LTCG and dividends, NRE FD interests and my salary income outside india? also the assets purchased in India have to be declared or all the assets in India or abroad?

    will appreciate if you can answer my above queries.
    Thanks for your advice.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. You need to include all your bank accounts, including NRE account. You would also need to include the NRE interest as exempt income in your tax return.
      2. You may not add the bank details now. If there is an inquiry, just explain the situation. Only when there is any change in taxable income, you may revise your tax return.
      3. Yes.
      4. Yes, you need to report your NRE interest as exempt income. Also, you need to include the same in every year and not on the last year as interest accrues quarterly. I would recommend to obtain an interest certificate from the bank for the financial year and include the income as per the certificate in your income tax return.
      5. I think only taxable income to be considered. Thanks.

  19. JAVED says:

    I HAVE PURCHASE PROPERTY OF Rs. 65 Lacs IN MUMBAI ON 24-MAY-2014 AND I FILED MY RETURN IN 22-03-2017 FOR ASST. YEAR 15-16 AFTER NEXT DAY OF FILING I GOT NOTICE FROM JUNAGADH ITO OFFICER OF MY ZONE, I HAVE SUBMIT MY COMPLIANCE WITH ITR FILING DETAILS AND SEND THE COMPLIANCE SUBMISSION ACKNOWLEDGEMENT TO ITO, NOW SHOULD I MEET OFFICER FOR THIS CONCERN. PLEASE GIVE YOUR SUGGESTION.

    thanks

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      This is a common type of notice. You are required to respond to the notice as instructed. First, reply to the notice after logging in to the IT website in your account in the Compliance section. Then, send the acknowledgement to the ITO with a letter. Thanks.

  20. Sangeeta Waskar says:

    As rightly pointed out by you, I have received notice under information code AIR-006 for purchase of immovable property.

    In this case, I want to state that this property we have purchased through salary source of my husband who is regularly paying the tax as well as filing the returns. As per banks procedure, it was mandatory to book flat on name of both while taking housing loan. I am housewife and have no source of income.

    Please suggest what reply I should give to the notice.

    Please send reply to my e-mail also.

    With regards.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. I am not sure what is mentioned in the notice. So, please elaborate.
      2. Usually, you would need to reply the notice electronically after logging into your account on the IT website and sending a copy to the concerned ITO. There is a drop down menu you need to select and have a little space for remarks. Thanks.

  21. Nagaraja says:

    My wife and I are US citizens, we sold a property in 2010 that was purchased in 1997. The proceedings of the sale(long term capital gains) was used to purchase Indian Government Tax free bond. After the Bond matured it was invested in a Fixed deposit in NRO account. We did not file an ITR in 2010 as the long time capital gains was used to purchase Tax free bond, but have since filed ITR for the 2014 and 2015. Can we repatriate the money from the home sale that is in the NRO-Fixed deposit? What forms do we need to submit to repatriate. Thanks.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. You were required to file the tax return in 2010 when you sold the property. You have no authority to determine the taxability on your own.
      2. It appears that you started filing tax return because you wanted the refund of TDS on NRO FD interest.
      3. As there is no TDS on the interest of bonds invested by a resident but TDS will apply for investment by an NRI. So, I would think that you would have invested in the bonds as a resident and did not allow the TDS to be deducted on the interest income of capital gains tax bonds, which is also a violation.
      4. Now, you want to remit all the money outside India. For which, I think a CA certificate in form 15CB and filing of form 15CA would be required in addition to the documents/form required by the bank. Please contact your bank and the CA. Thanks.

  22. B. Sreekumar says:

    DearSir,

    I have recieved a notice form IT Dept mentioning the CODE EXC001 (Cash transaction above 1000000.00 above in a month in the year 2014-14). I have gone through all my bank statements for the FYs 2013-14 and 214-15 and couldnt find any such transactions. I haven’t done any other deals during this period. I’m not a tax payer and not submitted ITR so far. So can you suggest an option how to submit compliance..?

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      Please respond that it is not related to you/your account/ your PAN. Please login and check the compliance section. There are drop down menu available for selection of a response. Based on your response, the IT department will review and may come back with another notice to provide more information and/or by requiring to file an income tax return for the year. So please double check before replying and contact your CA. Thanks.

  23. vyomesh shah says:

    Dear Jigarji,

    I will be glad if you let me know the following

    My parents ie. my father is 85 yrs and mother is 82 years old both of them have income of 3.5L each form interest from bank, as they are super senior citizen do they have to pay any income tax for the financial year 2016-2017.

    Thanks

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      No. As their income is less than the basic exemption amount (5L for super senior citizen), they are not required to file tax return. Thanks.

  24. FI says:

    I am an NRI. I recently got an notice from IT saying information Code CIB-401, sale of immovable property of Rs 5 lakh or more (Value assessed for stamp duty).
    i had below transactions during 1/3/2014 to 31/3/2015 –
    purchased flat in 2014
    did cancel my bajaj allianz policy and got fund of INR 1,70,000
    got profit of INR 1,21,000 from investment
    cancelled my investment from which i got the above profit INR 2,00,000
    cancelled another investment of INR 1,50,000
    cancelled all investments and used money for purchasing flat.
    source of income is NRI Salaries and invested in India
    Please advice.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. The question is not of purchase but of sale of property. Only sale of property results into a gain and may require filing of tax return.
      2. If your taxable income is more than 250,000, you are required to file tax return. Thanks.

  25. ajay says:

    got notice from IT ..CIB403 for FY 13-14 . What does this mean? at that time I didn’t have a job also. In 2014 July I got job. Help me in this.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      CIB-403 is Investment in Fixed Deposit/Time Deposit exceeding Rs. 2,00,000. So it means that you created FD of Rs. 2L or more during the year. This is normal and no need to panic. Just reply in the Compliance section in your IT account. Thanks.

  26. Dwiti says:

    My Husband shifted to Gulf country for job in Dec 2006
    • My self is having NRI status from 2008 as I got shifted to Gulf as depended (housewife)in March 2007.
    • Then onward my Husband and Myself (Joint ) has open NRO and NRE account in 2007 (Joint account) in indian Bank -SBI and started transferring fund to india in NRE account.
    • As in year 2007 , the Indian bank is having less than 4% interest rate in NRE account , However NRO account is having average 9% interest rate for the FD’s.
    • So, Many NRI’s use to transfer fund from NRE to NRO and book FD’s and pay IT as per regulation.
    • We have also transfer fund from NRE to NRO and booked multiple FD’s on joint name (self /husband as joint holder Or my husband name /mine as joint holder)on to earn high interest rate and pay IT as per regulation.
    • However in year 2012 the interest rate on NRE was also increased by RBI (around 9 %)and As per RBI guideline/scheme of May 2012 to allow transferring of fund from NRO amount back to NRE amount and book FD in NRE account below prescribe limit.
    • So in year 2013, we have prematurely break the all NRO FD and transfer fund back to NRE account (about 65 lakh) by fulfilling the 15 CA and 15CB certification from CA and then after rebook the FD in NRE with Joint account holder( my husband name /mine as joint holder)
    • Also, In year 2013, we have sold the our flat (joint holder) in Surat (@8.5 lakh) which was purchased in 2003 and Now rebook new flat in Mumbai (joint name).
    • Total Flat sold amount in half was shown while filling the return in both (myself and my husband ITR).

    One Mistake is our CA has shown my status as Resident Indian and my husband status as NRI while filling the return , However my bank status is NRI from 2008.
    • Now we have got letter from IT office to report as they have query related to ITR 2014 (13-14) on subject So Kindly guide us how to come out from the above issue and explain how and what to represent.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      You would need to understand the query raised by IT office. I don’t think residential status would generate a query. The query would be for either NRO to NRE transfer or reporting of capital gain. Please contact your CA and understand. If you have truthfully reported all your income and paid the tax, you do not need to worry. Thanks.

  27. Ramakumar says:

    I have received notice from income tax department with the following text for financial year: 2013.
    a) Contract of Rs.10,00,000 or more in the commodities exchange – 4,49,18,798
    b)Sale of option in securities (derivatives) in a recognized stock exchange – 2,80,625
    c) Sale of futures (derivatives) in a recognized stock exchanges – 5,85,72,855

    I don’t have so much money with me and really not sure how they have arrived at this amounts, also I have account with ICICI Direct where there is a FuturePlus StopLoss product where I can get the futures and options and sell them, so I think b) and c) may be related to that but I have no clue.
    Also I don’t have any taxable income in india and will not get paid. Can you please provide some direction on how to handle this one.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      These are the nominal amount of your derivative transactions. You are required to file the income tax return if you earned any income from these transactions. Please contact your CA and he will help you with the same. Thanks.

  28. A K DAS says:

    An NRI living in earns income abroad from business, but doesn’t pay taxes on all his earnings in any foreign country, remits to NRE account in India & also invests in FD & MF regularly, is that amount deposited in NRE account taxable? Also, is it necessary to file return, if such amount is not taxable in India?

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      An NRI’s income from businesses outside India is not taxable in India. India is not concerned whether the NRI has paid tax or not. It is the NRI’s liability. Now with FATCA/CRS, India will be sharing the data with other countries in the world and now the country of NRI would know about NRI’s money transfers and income in India and may follow up with NRI for taxes.
      For India, if income is not taxable, there is no need to file taxes. Thanks.

  29. Rajendra Patel says:

    Dear Jigar, I got notice from IT Department regarding “AIR-002” or “Paid Rs. 2,00,000 or more against Credit Card Bills”. How to resolve this issue. Please do needful help.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      You need to follow the steps as mentioned in the notice. Thanks.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>