Synopsis: This piece discusses the various kinds of common Income Tax notices issued in India, their purpose, and how to respond to each.
An Income Tax Notice is a formal communication channel used to inform taxpayers about any specific issue or discrepancies related to their tax return. In 2023, around 22,000 such notices were issued. Therefore, having knowledge about the various types of notices issued by the Income Tax Department and who to respond to each is crucial.
Common Types of Income Tax Notices and How to Respond to Them
1. Notice under Section 139(9)
This notice is issued when a filed Income Tax Return (ITR) is considered defective by the Income Tax Department. This usually happens due to missing or incorrect details.
Response: Upon receiving the notice, the taxpayer must rectify the errors, add missing details, and resubmit the corrected return. The resubmission should be done within the time limit mentioned in the notice, which is usually 15 days. On failing to respond to the notice, your return would be treated as invalid.
2. Notice under Section 142(1)
This notice is issued when the department wants additional information, classification, or documents to verify the details you have provided in your ITR. The Income Tax Department might also issue this notice if the taxpayer has not filed an ITR despite being liable to do so.
Response: Through the e-proceedings section in the e-Filing portal of Income Tax, taxpayers should submit accurate information and supporting documents within the mentioned deadline. Failure to do so could lead to penalties.
3. Notice under Section 143(1)
This notice is an automated notification from the department once the return is processed. It includes the income and tax calculation by the department based on the return submitted.
Response: If the taxpayer agrees to the calculation, they can pay the tax or accept a refund, and if the taxpayer disagrees with the calculation by the department, they can file a request under Section 154 to correct errors or mismatches.
4. Notice under Section 143(2)
The purpose of this notice is to inform the taxpayers that the return has been selected for detailed scrutiny to verify the accuracy of the information provided.
Response: The taxpayer must submit documents such as bank statements, expense records, or invoices. Hearings will be conducted either electronically or in person; therefore, it’s advisable to seek professional help to respond.
Also read: 7 EEE Investments That Offer 100% Tax-Free Returns in FY 2026 Every Investor Should Know
5. Notice under Section 148
This notice is issued when the department notices that the income is not disclosed, under-reported, or incorrectly claimed in previous years.
Response: The taxpayer should file a return for the relevant assessment year or give an explanation on why a reassessment should not be proceeded with.
6. Notice under Section 156
This notice is issued to specify the amount of tax, interest, or penalty payable by the taxpayer.
Response: The taxpayer must pay the amount demanded by the Income Tax Department within the given deadline, which is usually 30 days. If the amount demanded is incorrect, they can file an objection or a rectification request to the department.
How to Respond to Tax Notices: Step-by-Step
- Read the notice carefully and verify its authenticity by cross-checking the reference number and date of issue in the official Income Tax e-Filing portal.
- Log in to the e-Filing portal, review the notice, select the appropriate response, and submit the response
- Organise and upload relevant documents and respond within the given deadline. Ensure that the documents are legible and consistent with the information.
- Seek Professional help for notices that are too complex to handle independently. Notices issued under Section 143(2) and Section 148 might demand help from tax experts to comprehend calculations.
Conclusion
Income tax notices are a routine part of the tax administration process, and with the Income Tax Department relying more on data analytics and automated systems, such notices have become common. By identifying the type of notice received and responding accurately, taxpayers can resolve issues and avoid penalties.
Written by Nila Maria Jacob
