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The purpose of an income tax notice is to alert taxpayers about discrepancies, pending dues, or required clarifications in their tax filings, ensuring compliance with tax regulations.

Responding strategically to income tax notices safeguards your business from penalties, interest, and legal complications. With expert guidance, it becomes an opportunity to maintain compliance,

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Discover everything you need to know about Income Tax Notice

Income Tax Notice: Check & Authenticate ITR Notices Online

Even after filing your Income Tax Return (ITR) on time, you may still receive notices from the Income Tax Department (ITD). While this can be concerning, it is often a routine part of the tax process. Some notices request additional information or clarifications that require timely responses, while others are simply for your information. It is important to carefully verify the authenticity of any notice before taking further action to ensure proper compliance and avoid unnecessary penalties.

IncorpiQ helps you handle income tax notices quickly and easily. We assist in verifying notices and preparing the right responses. Get expert support to stay compliant and avoid penalties.

What is an Income Tax Notice?

An income tax notice is an official letter sent by the Income Tax Department to a taxpayer. It informs the taxpayer about an issue or query related to their tax return or tax payments. The notice could be about missing information, discrepancies in the filed return, tax assessments, or a request for additional documents. When a taxpayer receives such a notice, they are required to respond within the given time to resolve the matter with the tax authorities.

Types of Income Tax Notices

The Income Tax Department issues various types of notices depending on the reason for communication. Some common types include:

Notice under Section 142(1): Requests additional information or documents related to your filed return, or asks you to file a return if not filed.
Notice under Section 139(9): Issued when a return filed is found to be defective or incomplete.
Notice under Section 148: Issued when the department believes income has escaped assessment or the return was not filed.
Notice under Section 156: Issued when there is a demand for tax, penalty, or other dues to be paid.
Intimation under Section 143(1): A computerised intimation after processing your return, showing any tax due or refund.
Notice under Section 143(2): Indicates your return has been selected for detailed scrutiny.
Notice under Section 131: Issued when the officer suspects concealment of income.
Notice under Section 245: Relates to adjustment of refunds against outstanding tax demands.

Each notice serves a specific purpose and requires a timely response to avoid penalties.

IT Notice Under Section 133(6)

Under the E-Verification Scheme 2021, the Income Tax Department may issue this notice if discrepancies are found between your Income Tax Return (ITR) and the data in your Annual Information Statement (AIS).

Common Reasons for Receiving This Notice:
ITR not filed even though income exceeds the basic exemption limit as per AIS data.
Income mismatch: Salary, interest, or capital gains in the AIS are not correctly reported in the ITR.
Expense inconsistency: Significant expenses (property, investments) in AIS are inconsistent with the income declared in the ITR.
Steps to Respond to Notice u/s 133(6):
1
Review and Compare: Carefully review the notice. Compare the AIS data with your ITR to identify the mismatch and its cause.

2
Log in to the Income Tax Portal: Navigate to: Pending Actions > Compliance Portal > E-Verification

3
Submit Your Response: Fill in the questionnaire provided under the e-verification section and upload the necessary supporting documents.

If the Mistake Is Yours:

• File an Updated Return under Section 139(8A).
• Pay any additional tax liability and applicable penalties.
• Submit your response confirming this action on the portal.

If the Error Is on the Department’s Side:

• Provide a clear explanation for the discrepancy.
• Attach all necessary supporting documents to prove your case.

Notice Under Section 142(1)

A notice under Section 142(1) of the Income Tax Act is issued by the Assessing Officer (AO) in the following two situations:

1
If you have filed your ITR, but the AO requires additional information, documents, or clarification to complete the assessment.

2
If you have not filed your return, the AO directs you to file it within the prescribed time.

This notice is aimed at gathering the necessary details to ensure a fair and complete assessment of your income.

Consequences of Not Responding:

• A penalty of ₹10,000 for each instance of non-compliance.
• Prosecution, which may lead to imprisonment for up to 1 year.
• In some cases, both penalty and prosecution may apply.

Intimation Under Section 143(1)

Once you file your ITR, it’s electronically processed by the Central Processing Centre (CPC). During this, the CPC recalculates your income after making automatic adjustments like:

Correction of any arithmetical errors.
Disallowance of incorrect claims clearly evident from the return.
Rejection of losses or expenses wrongly claimed.
Addition of income not reported in the return.

After processing, the CPC issues this intimation in one of the following three cases:

Tax is payable by the taxpayer.
Refund is due to the taxpayer.
No tax or refund, but there is a change in the amount of loss carried forward.

The intimation must be sent within 9 months from the end of the financial year in which the return was filed.

Example: If your return for AY 2024–25 was filed on 27 July 2024, the intimation can be issued up to 31 December 2025.

Note: Processing under Section 143(1) has been mandatory since Assessment Year 2017–18.

How to Analyse an Intimation u/s 143(1)?

First, review the comparison between the figures you filed and the ones recalculated by the CPC. Identify any mismatches in:

• Income   • Deductions   • TDS or prepaid taxes

If there is an error: You can file a rectification request under Section 154 within 4 years from the end of the relevant assessment year.
If the tax demand is correct: Pay the amount promptly using the payment link provided in the intimation to avoid interest.

Notice Under Section 143(2)

A notice under Section 143(2) is issued when your income tax return is selected for scrutiny. This means the Assessing Officer (AO) wants to examine your return in detail to ensure that:

You have not understated your income.
You have not claimed excessive losses.
You have not paid less tax than required.

This notice is usually followed by a questionnaire and a request for supporting documents. The AO must issue this notice within 3 months from the end of the financial year in which the return was filed.

Example: If Mohan filed his return on 19 June 2024 (FY 2024-25) for AY 2024–25, the financial year ends on 31 March 2025. Therefore, the last date for issuing this notice would be 30 June 2025.
How to Respond to Notice u/s 143(2):
1
Review the Notice Thoroughly
Read the notice and its annexure carefully to understand the reason for scrutiny and the information requested.

2
Prepare Your Response
Draft a cover letter with a clear explanation addressing all queries honestly. Compile and attach all supporting documents requested.

3
Submit the Response Online
Log in to the Income Tax e-filing portal. Go to e-Proceedings, upload your cover letter and documents, and submit your response.

Notice Under Section 245

This notice is issued when the Assessing Officer (AO) intends to adjust your current year’s refund against an outstanding tax demand from previous years.

However, such an adjustment can only be made after:

✓Issuing a proper notice to you.
✓Giving you an opportunity to respond.

Response Timeline: 30 Days

You must respond within 30 days of receiving the notice. If no response is received, the AO may assume you agree to the adjustment and proceed with it.

💡

Important Tip:

It’s highly recommended to respond promptly. Always verify the accuracy of the old tax demand before agreeing to the refund adjustment.

Most Common Reasons for Receiving an Income Tax Notice

You may receive a notice from the Income Tax Department for several reasons. Some of the most common causes include:

1
Mismatch in Income or Tax Details

Discrepancy between income reported in your ITR and Form 26AS/AIS, or mismatch in TDS amounts.

2
Non-Filing or Delayed Filing of ITR

Failure to file your income tax return on time or completely missing the filing deadline.

3
Use of Incorrect ITR Form

Filing your return using the wrong ITR form based on your income type or source.

4
High-Value Transactions

Large cash deposits, property purchases, or credit card payments not properly reported in your ITR.

5
Investments in Spouse’s Name

Failing to disclose investments in your spouse’s name under the clubbing of income provisions.

6
Inaccurate Reporting of Capital Gains

Failing to report or misreporting long-term capital gains from shares or mutual funds.

7
Incomplete Documentation

Not submitting required supporting documents when requested or filing incomplete information.

8
Random Scrutiny

Your return is picked up for random scrutiny by the Assessing Officer for further verification.

9
Omission of Income

Not disclosing income from other sources like interest, freelance work, or rental income.

10
Outstanding Tax Liability

The department may adjust your refund against a pending tax liability from earlier years (Notice u/s 245).

11
Non-Payment of Self-Assessment Tax

Submitting your return without paying the self-assessment tax due, resulting in an incomplete filing.

12
Suspected Tax Evasion

If the department believes you have deliberately evaded tax in past financial years.

What to Do After Receiving an Income Tax Notice

If you receive a notice from the Income Tax Department, it’s important to act promptly and correctly. Here are the steps you should follow:

1

Read the Notice Carefully

Understand the purpose of the notice—whether it’s for a mismatch, non-filing, scrutiny, demand, or any other reason. This will help you determine the right course of action.

2

Verify the Details

Ensure the notice is genuine and meant for you by checking that your PAN, full name, address, and the Assessment Year match your records.

3

Identify the Issue or Discrepancy

Try to find out what triggered the notice, such as a mismatch in income, failure to file, incorrect form selection, or unreported high-value transactions.

4

Check Online on the e-Filing Portal

Log in to your Income Tax account and confirm the notice appears under e-Proceedings. Check for any specific instructions or deadlines.

5

Respond Within the Time Limit

It is critical to respond within the specified time frame. Delays may lead to penalties, interest, or even prosecution, depending on the notice.

6

Support Your Response with Proper Documentation

When replying, include all relevant documents and evidence (e.g., Form 16, bank statements, investment proofs) and ensure your explanation is clear and accurate.

⚠️
Legal Consequences of Ignoring an Income Tax Notice

Ignoring an income tax notice can lead to serious legal and financial consequences. The department may take one or more of the following actions against you:

›

Financial Penalties: You may be charged with penalties for non-compliance, which can be a significant amount, along with interest on any unpaid taxes.

›

Best Judgement Assessment: The Assessing Officer may proceed to assess your income and tax liability based on the information available to them, which may result in a higher tax demand.

›

Invalid Return & Loss of Benefits: Your return could be treated as invalid, leading to the disallowance of claimed losses and the loss of exemptions or deductions.

›

Prosecution: In serious cases of non-compliance or suspected tax evasion, the department may initiate legal proceedings, which can lead to imprisonment.

Ignoring notices can damage your financial credibility. It is always important to respond promptly and correctly to avoid these severe outcomes.

Essential Documents to Respond to an Income Tax Notice

Here is a list of commonly required documents when preparing a reply to an income tax notice:

📋Copy of the Income Tax Notice

The original notice received from the Income Tax Department.

💼Proof of Income

• Salary slips & Form 16 (Part B)

• Income from business or profession statements (if applicable)

📄TDS Certificates

• Form 16 (Part A)

• Form 16A for non-salary TDS

🔐Investment Proofs

(If deductions or exemptions are claimed)

• LIC premium receipts, PPF passbook, ELSS statements, etc.

🏦Bank Statements

To verify high-value transactions or specific income entries.

🧾Form 26AS / AIS

To match TDS and income as reported by third parties.

📎Any Other Supporting Documents

Documents specific to the issue, like capital gains reports, rent agreements, or loan statements.

How to Authenticate an Income Tax Notice

Before responding, it’s essential to ensure the notice is genuine. You can verify the authenticity of any notice, order, or letter through the income tax e-filing portal.

1

Visit the e-Filing Portal

Go to the Income Tax e-Filing Portal homepage. Under the ‘Quick Links’ section, click on ‘Authenticate Notice/Order Issued by ITD’.

2

Choose Verification Method

You will be presented with two methods to verify the document. Follow the steps for your chosen method below.

Method 1: Using PAN Details

1. Enter Details: Provide your PAN, document type, assessment year, issue date, and mobile number.

2. Validate OTP: Enter the OTP sent to your mobile number to proceed.

If Valid: The system will show the DIN and issue date of the document.
If Not Found: It will display: “No record found for the given criteria.”

Method 2: Using DIN

1. Enter Details: Provide the Document Identification Number (DIN) from the notice and your mobile number.

2. Validate OTP: Enter the OTP sent to your mobile to proceed.

If Valid: The portal will display a success message confirming its validity.
If Not Found: It will show: “No record found for the given Document Number.”

 

How Can IncorpiQ Assist with Your Income Tax Notice?

🧑‍💼

Expert Consultation
Providing personalised guidance from experienced Tax Experts.
🔍

Notice Analysis
Helping you understand the specifics and requirements of your notice.
📂

Document Identification
Assisting in identifying and compiling all necessary documentation.
✍️

Response Preparation
Crafting precise and timely responses to address the ITD’s concerns.
✅

Compliance Assurance
Ensuring your response complies with tax laws to minimise further queries.

Income Tax Notice – Frequently Asked Questions

Explore commonly asked questions about GST Registration in India. Learn about the costs involved, legal formalities, and key advantages to help you make confident and informed choices.

An Income Tax Notice is a communication sent by the Income Tax Department to taxpayers for various reasons such as discrepancies in returns, failure to file ITR, verification of details, or demand for unpaid taxes.

You may receive a notice due to reasons like mismatch of income details, failure to report income, errors in ITR, claiming ineligible deductions, late filing, or random scrutiny by the tax department.

  • Notice u/s 139(9): Defective return

  • Notice u/s 143(1): Adjustment or mismatch in ITR

  • Notice u/s 143(2): Scrutiny notice for detailed assessment

  • Notice u/s 148: Income escaped assessment

  • Notice u/s 156: Demand notice for outstanding tax, penalty, or interest

  • Notice u/s 245: Adjustment of refund against tax payable

Read the notice carefully, identify the section mentioned, and understand the reason. Respond online through the e-filing portal within the specified timeline. Seek help from a Chartered Accountant (CA) for accurate drafting and compliance.

Ignoring notices can result in penalties, interest, prosecution, or further scrutiny. It may also block refunds or impact your compliance history with the department.

Yes, if the notice points out mistakes or missing income, you may need to revise and refile your ITR within the allowed timeline to avoid penalties.

Yes. Even salaried taxpayers can get notices for mismatch in TDS, unreported allowances, incorrect deductions, or if their employer’s TDS details don’t match with the ITR filed.

  • Copy of the notice received

  • PAN & Aadhaar details

  • Filed ITR copy & acknowledgment

  • Form 16 / 16A / 26AS (TDS certificates)

  • Bank statements & investment proofs

  • Supporting documents for deductions/exemptions claimed

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