Mistakes that commonly lead to notices
1. Claiming ITC not in GSTR-2B
Input tax credit claimed beyond what suppliers have reported shows up immediately. It can lead to reversal, interest and a notice.
2. GST turnover not matching the ITR
The department compares turnover in GST returns with the income tax return. Differences from credit notes, advances or timing must be explainable from your books.
3. Unrecorded cash sales
Cash deposited in the bank but missing from the books looks like unexplained income. Record cash sales daily.
4. Mixing personal and business transactions
Personal spending in business accounts distorts profit and makes scrutiny harder to answer.
5. TDS not deducted or not matched
Missing TDS on rent, contractor or professional payments can disallow the expense. TDS deducted by customers that you do not record creates mismatches with Form 26AS.
6. No stock records
Without stock records, it is difficult to support gross profit or answer questions on purchases that seem high.
Monthly habits that prevent notices
- Record every sale and purchase, including cash, in the books each month.
- Reconcile every bank account with the books.
- Match purchase entries with GSTR-2B before filing GSTR-3B.
- Match GSTR-1 with the sales register.
- Check TDS deducted by customers in Form 26AS each quarter.
- Keep bills and contracts for all expenses.
| Check | Frequency | Notice it helps avoid |
|---|---|---|
| Bank reconciliation | Monthly | Unexplained deposits |
| GSTR-2B vs purchase register | Monthly | Excess ITC |
| GSTR-1 vs sales register | Monthly | GSTR-1 and 3B mismatch |
| Form 26AS vs books | Quarterly | TDS credit mismatch |
| GST turnover vs ITR | Yearly | Turnover mismatch |
Frequently asked questions
{{ f.q }}
{{ f.a }}
Sources
Information is for general guidance and not a substitute for professional advice. Rules, rates and due dates change; confirm with us before acting.