Income Tax Notice explained: this guide covers what Income Tax Notice means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
What is an Income Tax Notice?
An income tax notice is an official communication from the Income Tax Department to a taxpayer, seeking information, clarification, or additional documents regarding the taxpayer's income, deductions, or tax computation. Receiving a notice can be alarming, but many notices are routine — for example, a notice under Section 143(1) is an intimation (not really a notice) that your ITR has been processed.
Do not ignore any notice. Failing to respond within the specified time can result in ex-parte assessment (assessment done in your absence based on available information), which almost always results in a higher tax demand.
- Check which Section the notice is under — determines its seriousness
- Section 143(1) intimation: Usually routine — just check if there is a demand or refund
- Section 148 or 131: More serious — seek CA assistance
- Always respond online via the Income Tax e-filing portal
- Notice period (time to respond) is typically 15–30 days — do not let it lapse
Types of Income Tax Notices
Section 143(1) — Intimation / Processing Notice
What it is: This is an intimation, not a notice. It informs you that your ITR has been processed by the Centralised Processing Centre (CPC) and shows the tax computed by the department vs what you filed.
Three possible outcomes:
- No demand, no refund: Your computation matches the department's — no action needed
- Refund payable: You overpaid tax — refund will be credited to your bank account
- Demand raised: Department's computation shows more tax — pay or contest
Response: If demand is raised, verify the discrepancy. If valid, pay via Challan 280. If incorrect, file a response disagreeing with the demand on the portal.
Time limit for issue: Within 9 months from end of financial year of ITR filing.
Section 143(2) — Scrutiny Notice
What it is: Your ITR has been selected for detailed scrutiny (audit) — the officer wants to verify the income, deductions, and credits claimed.
Why issued: High deductions, significant mismatch between AIS and ITR, high-value transactions, random selection, or specified parameters (e.g., cash deposits, foreign income).
Response time: Typically 15–30 days to submit documents and explanations.
What to do: Compile all supporting documents (investment proofs, bank statements, sale deeds, etc.) and respond through the portal. Strongly recommended to engage a CA.
Time limit for issue: Within 3 months from end of financial year of ITR filing (6 months for international transactions).
Section 139(9) — Defective Return Notice
What it is: Your ITR has a technical defect — missing information, incomplete schedules, or wrong form used.
Common reasons:
- ITR filed but tax not paid (if liability exists)
- Signed/unverified ITR-V submitted without e-verification
- Income not filled in correct schedule
- Missing bank account details
Response time: 15 days from notice date (can request extension).
What to do: Respond on the portal confirming whether you agree with the defect — if yes, rectify and refile. If you disagree, provide reasons.
Section 148 — Income Escaping Assessment (Reassessment)
What it is: The department believes income has escaped assessment — you have not disclosed income or have under-reported it. This is a serious notice triggering reassessment.
Time limit: Within 3 years from end of AY (for income > ₹50 lakh, extended to 10 years).
What to do: File an updated return (ITR-U) if income was genuinely missed, or respond contesting the reassessment. Mandatory to engage a CA or tax advocate.
Section 148A — Notice Before Reassessment
Before issuing a Section 148 notice, the department must issue a Section 148A notice giving you an opportunity to explain why reassessment should not be initiated. This is a recent addition (post Finance Act 2021).
Response time: Minimum 7 days to respond.
Section 156 — Notice of Demand
What it is: A demand notice requiring you to pay additional tax, interest, or penalty determined during assessment.
Response time: 30 days to pay the demand.
What to do: Pay if valid, or file an appeal before the CIT(A) — Commissioner of Income Tax (Appeals) — if you disagree.
Section 131 — Summons for Information
What it is: A summons requiring you to appear in person before the assessing officer or provide specific documents.
What to do: This is serious. Appear in person as required or send an authorized representative (CA/advocate). Engage professional help immediately.
Section 133(6) — Notice for Information from Third Parties
What it is: The department seeks information about your financial transactions from banks, registrars, or other third parties — usually triggered by high-value transactions in AIS.
What to do: If you receive this notice directly, respond explaining the source of funds/transactions.
Section 245 — Adjustment of Refund Against Outstanding Demand
What it is: Your refund for the current year is being adjusted against a pending tax demand from a previous year.
Response: If you agree with the demand, no action needed. If you disagree with the old demand, contest it within 30 days.
Section 271 / 271B — Penalty Notice
Penalty notices are issued for: failure to maintain books of accounts, failure to get accounts audited, concealment of income, furnishing inaccurate particulars, etc. Penalties can range from ₹5,000 to 300% of tax evaded.
How to Check and Download Income Tax Notices
- Login to incometax.gov.in
- Go to e-File  Income Tax Returns  View Notices and Orders
- All pending notices, orders, and intimations appear here
- Download the notice document for review
- Alternatively: Go to Pending Actions  e-Proceedings to see notices requiring response
How to Respond to Income Tax Notice Online
- Login to incometax.gov.in  Pending Actions  e-Proceedings
- Click on the relevant notice
- Read the notice carefully — identify what the department is asking for
- Select "Submit Response" or "View Notices" as applicable
- For document requests: Upload scanned copies of relevant documents
- For factual disputes: Type your explanation in the remarks field
- Submit — an acknowledgement is generated
- Track response status on the portal
Common Reasons for Receiving Income Tax Notice
| Reason | Likely Notice Section |
|---|---|
| Mismatch between ITR and Form 26AS / AIS | 143(1), 143(2) |
| Large cash deposits in bank (not matched with income) | 143(2), 131 |
| High-value property purchase not reflected in ITR | 148, 148A |
| Capital gains not reported (MF redemption, stock sale) | 143(1), 143(2), 148 |
| Tax deducted but ITR not filed | 148, 142(1) |
| Wrong ITR form used | 139(9) |
| Excessive deductions (80C, 80D) without proof | 143(2) |
| Foreign income or assets not disclosed | 148, Black Money Act |
| ITR filed but not verified | 139(9) |
What NOT to Do When You Receive a Notice
- Do not ignore it: Every notice has a response deadline — missing it worsens your situation
- Do not panic unnecessarily: Many notices (especially 143(1)) are routine
- Do not respond without reading carefully: Understand exactly what is being asked before responding
- Do not respond offline: All responses must go through the online portal — physical letters are not accepted
- Do not submit incorrect information: Any false statement can attract penalty under Section 277
When to Hire a CA for Income Tax Notice
- Always engage CA for: Section 148 (reassessment), Section 143(2) scrutiny, Section 131 summons, penalty notices, or any notice involving amounts above ₹5 lakh
- Can handle yourself: Section 143(1) intimation with small demand or refund, Section 139(9) defective return with clear technical issue