Income Tax Notices — Types & How to Respond

An income tax notice isn’t necessarily bad news — many are routine, automated, and resolved with a simple clarification. But knowing which type you’ve received, and responding correctly within the deadline, matters enormously.

The Most Common Notices

Notice Type

What It Means

Typical Trigger

Intimation (successor to Section 143(1))

Automated processing summary comparing your return against department records

Filed every return — usually informational, sometimes shows a small demand or refund adjustment

Defective return notice (successor to Section 139(9))

Your return has a technical defect — wrong ITR form, missing schedule, mismatched figures

Filing errors, using the wrong ITR form

Scrutiny notice (successor to Section 143(2))

Your return has been selected for detailed examination

Random selection, or specific red flags (large deductions, mismatched AIS data)

Reassessment notice (successor to Section 148)

The department believes income has escaped assessment in a past year

New information suggesting under-reported income

Demand notice (successor to Section 156)

You owe additional tax as determined by an assessment or intimation

Following any of the above processes, if a shortfall is found

Show-cause notice for penalty

The department proposes to levy a penalty and seeks your explanation

Under-reporting, misreporting, or non-compliance findings

How to Respond — General Principles

1.          Read the notice carefully — identify the specific section, the assessment year involved, and the exact deadline for response.

2.          Don’t ignore it, even if you believe it’s a mistake — non-response itself can lead to adverse orders being passed without your side being heard.

3.          Respond through the e-filing portal — nearly all notices today require an electronic response, with supporting documents uploaded directly.

4.          Keep your explanation factual and documented — bank statements, invoices, and agreements carry far more weight than a general explanation.

5.          Seek professional help for scrutiny or reassessment notices — these carry higher stakes and often benefit from a chartered accountant’s involvement in drafting the response.

The Intimation — Usually Nothing to Worry About

Most taxpayers receive an intimation after filing — this is simply the department’s automated comparison of your return against their records. If it matches, no action is needed. If there’s a discrepancy (e.g., a TDS mismatch), you can respond online, and in many cases, a corrected intimation resolves the matter without further escalation.

When a Notice Signals Something More Serious

Scrutiny and reassessment notices deserve genuine attention. A reassessment notice, in particular, means the department has specific information suggesting income wasn’t properly reported — ignoring the deadline for response can result in a best judgment assessment, where the officer determines your income based on available information, often unfavourably, without further input from you.

Worked Example

A taxpayer receives an intimation showing a ₹15,000 demand due to a TDS mismatch — their employer’s Form 138 filing was delayed, so the TDS hadn’t yet reflected in Form 26AS/168 at the time of processing. They respond through the portal, attaching their Form 130 salary certificate as proof of the TDS actually deducted, and the demand is subsequently corrected once the employer’s return is processed.

Frequently Asked Questions

Q1. How long do I have to respond to a scrutiny notice? The specific deadline is mentioned in the notice itself, typically ranging from a few weeks to a month — always check the exact date rather than assuming a standard period, since timelines vary by notice type.

Q2. What happens if I miss the response deadline? Depending on the notice type, missing the deadline can result in a best judgment assessment, additional penalty exposure, or the original demand simply becoming enforceable — always request an extension in advance if you genuinely cannot meet the deadline, rather than letting it lapse silently.

Q3. Do all notices require me to hire a tax professional? Simple intimations and minor mismatches can often be handled independently through the portal. For scrutiny, reassessment, or penalty show-cause notices, professional assistance is strongly advisable given the complexity and stakes involved.

Reflects the notice framework applicable for Tax Year 2026-27, carried forward under the Income Tax Act, 2025 with renumbered sections.

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.