As June draws to a close, taxpayers across India face two significant milestones: the final day for the Income Tax Department to issue scrutiny notices for eligible returns and the start of a month packed with crucial compliance deadlines. Individuals and businesses must remain vigilant to avoid penalties and ensure smooth tax processing.
June 30: Last Day for ITR Scrutiny Notices
June 30 marks the last opportunity for the Income Tax Department to issue a scrutiny notice under Section 143(2) for Income Tax Returns (ITRs) selected for detailed examination. Receiving such a notice does not automatically imply tax evasion or fraud. Instead, it indicates that the department wishes to verify specific details, such as reported income, deductions, exemptions, or tax credits.
Why You Might Receive a Scrutiny Notice
The Income Tax Department often selects returns for scrutiny due to discrepancies. These can include mismatches between information declared in the ITR and data available from sources like Form 26AS, the Annual Information Statement (AIS), or bank records. Returns involving unusually large financial transactions, inconsistencies in income reporting, or connections to previous reassessment proceedings may also be flagged for examination.
Responding to a Scrutiny Notice
If you receive a scrutiny notice, you can access it via your registered email, postal address, or by logging into the Income Tax e-filing portal. Navigate to 'Worklist' then 'e-Proceedings' to view the notice. You have the option to accept the department's observations and upload requested documents or submit a detailed response explaining any disagreements. It is crucial not to ignore these notices, as failure to respond can lead to additional tax demands, penalties, interest liabilities, or delays in processing refunds.
Key Tax Deadlines to Track in July
Beyond the June 30 scrutiny notice deadline, July presents a series of essential compliance dates for various tax obligations:
- July 7: This is the due date for depositing Tax Deducted at Source (TDS) for the April-June quarter, specifically where quarterly payment approval has been granted. Certain declarations and prescribed forms received during the quarter are also due.
- July 15: Multiple reporting obligations become due for government offices, stock exchanges, authorized dealers, IFSC units, and intermediaries dealing with non-resident investors.
- July 30: Tax deductors are required to file the challan-cum-statement for specified tax deductions made during the month of June.
- July 31: This is arguably the most critical deadline of the month. Individuals filing ITR-1 and ITR-2 for Assessment Year 2026-27 must submit their returns by this date. Missing this deadline can result in late filing fees and may affect the ability to carry forward certain losses. Additionally, this date is also the deadline for filing various quarterly TDS and TCS returns for the quarter ended June 30, including TDS statements related to salary payments and payments made to non-residents. Several prescribed forms, such as Form 10E for relief on salary received in arrears, are also due.
Given the density of compliance deadlines in July, taxpayers and businesses are strongly advised to review their pending obligations well in advance. Proactive preparation helps avoid penalties, additional notices, and potential delays in refund processing.