Receiving an income tax notice can be unsettling, but it doesn’t always mean you’ve done something wrong. With tax authorities stepping up scrutiny, it’s more important than ever to understand these notices and how to respond. Ignoring them can lead to penalties, so let’s break down the common types, why you might get one, and what steps to take.
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- Intimation Notice – Section 143(1)
- What it is: This is a preliminary notice sent after your ITR is processed. It highlights any adjustments made, like calculation errors or mismatches in your TDS. It’ll also tell you if you’re due a refund or owe more tax.
- Why you might get it: Discrepancies between your ITR and Form 26AS/Form 16/AIS, math errors, or incorrect tax payments (either too much or too little).
- How to respond: First, verify the adjustments against your records. If they’re correct, and it’s a refund or no demand, you generally don’t need to do anything. If there’s an extra tax demand, pay it. If you believe the adjustments are wrong, you can file a revised return or submit a rectification request online.
- Defective Return Notice – Section 139(9)
- What it is: You’ll get this if your ITR has errors or incomplete information.
- Why you might get it: Missing essential details (like bank information or income sources), selecting the wrong ITR form, or mismatches in personal details (PAN, name).
- How to respond: Correct the issues identified in the notice and file a revised return (often called a “response to defective notice”) within the given timeframe, usually 15 days. If you don’t, your original return might be considered invalid.
- Income Escapement Notice – Section 148 (Reassessment)
- What it is: This notice is issued if the tax department believes you’ve underreported income or that some income wasn’t assessed. This typically follows an inquiry under Section 148A.
- Why you might get it: High-value transactions (like property deals or large bank deposits) that aren’t reflected in your ITR, suspected tax evasion, or information received from other sources (like your Annual Information Statement).
- How to respond: The notice should explain why it was sent. If not, ask the Assessing Officer (AO) for the reasons. Then, submit a detailed response within the specified time (usually 30 days), providing documents and explanations for your reported income. If you genuinely missed some income, consider filing an updated return. You can also object to the notice if you think it’s invalid.
- Notice for Non-Filing of ITR – Section 142(1)
- What it is: This notice comes your way if you haven’t filed a return despite having taxable income, or if you’ve filed but the AO needs more information or documents to complete the assessment.
- Why you might get it: High TDS deductions appearing in your Form 26AS but no ITR filed, or the department suspects you have income based on financial transactions.
- How to respond: If you’re required to file, do so immediately within the notice’s deadline. If you’re not liable to file, submit a reply explaining why. If additional documents are requested, provide them promptly through the e-filing portal. Not complying could lead to a best judgment assessment and penalties.
- Penalty Notice – Section 234F (Late Filing Fee)
- What it is: This notice imposes a penalty for filing your ITR after the due date.
- Why you might get it: You filed your ITR after the prescribed due date (e.g., usually July 31st for individuals).
- How to respond: Simply pay the penalty. It’s typically ₹5,000 if your total income exceeds ₹5 lakh, and ₹1,000 if your total income is up to ₹5 lakh (if filed by December 31st of the assessment year).
- Tax Demand Notice – Section 156 (Notice of Demand)
- What it is: This notice tells you that you owe additional tax, interest, or penalties after an assessment, reassessment, or rectification order.
- Why you might get it: Underpayment of tax, disallowed deductions or claims, mathematical errors in your return, or a mismatch in TDS details.
- How to respond: Verify the demand amount and the reason for it. If you agree, pay the amount within 30 days. If you disagree, submit a response online with supporting documents and explain your reasons (e.g., you’ve already paid, or you’ve filed an appeal).
How to Avoid Tax Notices
Tax experts offer some simple yet effective tips to prevent getting these notices:
- File your ITR on time and verify it: Always submit your ITR before the deadline and complete the verification process (e-verify or send ITR-V) within 30 days of filing.
- Reconcile Form 26AS/AIS/Form 16: Before filing, make sure the income and TDS/TCS reported in your ITR match the information in these forms.
- Report all income sources: Don’t miss out on declaring any income, whether it’s from salary, interest, capital gains, rent, or freelance work.
- Keep thorough financial records: Hold onto all relevant documents—bank statements, investment proofs, invoices, receipts, and proofs of deductions—for at least six years from the end of the relevant assessment year.
- Consult a tax expert: If your financial situation is complicated, or you’re unsure about any aspect of tax filing, it’s wise to get professional advice.
The ITR filing season for FY 2024-25 (AY 2025-26) is currently underway. As of July 17, 2025, over 1.36 crore income tax returns have been filed, with a significant number already verified and processed.
