What to Do When You Get an Income Tax Notice in India

Most income tax notices in India are routine clarification requests, not accusations. Here's how to read the notice, check your records, and know when you need a CA.

24 April 20265 min read

An email from the Income Tax Department lands in your inbox and your stomach drops. The word "notice" triggers images of raids, penalties, and courtrooms. Before you spiral: the vast majority of income tax notices in India are automated system-generated messages asking you to clarify a mismatch or submit a document. Most can be resolved without a lawyer, without a hearing, and without paying anything extra — if you act before the deadline.

This guide walks you through exactly what to do: how to read the notice, which type it is, what to check first, how to respond online, and when the situation genuinely warrants calling a chartered accountant.

Read the notice before you do anything else

The single most important thing is to read the notice carefully before panicking or acting. Note these four things:

Section number: The section of the Income Tax Act under which the notice was issued (143(1), 139(9), 142(1), 148, etc.). This tells you what the IT department is asking and how serious it is.
Assessment Year (AY): Which year's income is under scrutiny. AY 2024-25 means the income you earned in FY 2023-24.
Reason or demand: Is it pointing out a specific mismatch, asking for documents, or raising a tax demand? The notice will state this.
Response deadline: Every notice has a deadline. Missing it escalates the matter automatically — penalties, ex-parte assessments, and in serious cases, attachment orders.

Common types of income tax notices in India

Knowing the section number tells you exactly what you're dealing with:

143(1) — Intimation: The most common. The department has processed your ITR and found a discrepancy — usually a calculation difference or a mismatch between what you declared and what appears in Form 26AS. It may carry a tax demand or a refund adjustment. Many of these are resolved by checking your 26AS and, if the ITR was filed correctly, filing a rectification request.
139(9) — Defective return: Your ITR has a technical error — missing schedules, mismatched figures, or an incomplete filing. You typically get 15 days to rectify the defect online. If you ignore it, the return is treated as never filed.
142(1) — Inquiry before assessment: The assessing officer wants more information before completing an assessment. You'll be asked to submit specific documents or answer questions. This is more involved — a CA is usually worth calling here.
148 — Reassessment: The department believes income from a prior year escaped assessment. This is one of the more serious notices and almost always warrants professional help. The look-back period for most cases is 3 years; for income above Rs 50 lakh it can be 10 years.
156 — Tax demand notice: A formal demand for tax, interest, or penalty. You have 30 days to pay or challenge the demand. Do not ignore this.
245 — Set-off of refund against demand: The department intends to adjust a pending refund against an outstanding demand from a different year. You can agree or disagree through the portal.

Check your AIS and Form 26AS before responding

Before drafting a response, log into the Income Tax portal (incometax.gov.in) and download two documents: your Annual Information Statement (AIS) and your Form 26AS for the assessment year in question.

AIS shows everything the government knows about your financial transactions that year — salary, interest income, dividends, securities transactions, foreign remittances, GST turnover, and more. Form 26AS shows TDS deducted against your PAN. Compare both against the ITR you filed.

Most 143(1) mismatches come from one of three sources: TDS not reflecting in 26AS (employer error), income that appeared in AIS but wasn't reported in the ITR (bank interest, dividends), or a computation difference the department disagrees with. Identifying the source before you respond means you can either accept the demand, disagree with supporting documents, or file a rectification.

When you can respond yourself

Many notices can be handled without professional help if you are comfortable logging into the income tax portal and your tax situation is straightforward:

A 143(1) intimation where the mismatch is small and you agree with the department's computation — you can pay the demand and close it.
A 139(9) defective return notice where the error is a technical omission — log in, rectify the specific field, and resubmit.
A 245 set-off notice where you genuinely had an outstanding demand — agree via the portal.
Any notice where the ITR was correctly filed and the discrepancy is clearly an error on the department's side — file a rectification request under Section 154 with your supporting documents.

When to call a CA immediately

Certain situations have enough at stake that professional advice is worth the cost of a session. A chartered accountant who specialises in tax can read the notice, advise on the right response strategy, and draft a proper reply.

Any 148 notice (reassessment): The department is alleging concealment from a prior year. How you respond sets the tone for the entire proceeding.
A 142(1) notice asking for documents you're not sure how to produce — especially if it involves business income, capital gains, or foreign assets.
A large tax demand you believe is wrong — filing an incorrect objection can close off options. A CA can advise whether to pay under protest, file rectification, or appeal.
The deadline is close. If you have fewer than 5 days left and don't understand the notice, a 30-minute call with a CA is far cheaper than missing the deadline and facing a penalty.
You have capital gains, foreign income, ESOPs, or rental income — these are areas where AIS-to-ITR mismatches are more likely and more complex to explain.

How to respond to an income tax notice online

All responses are submitted through the Income Tax e-Filing portal (incometax.gov.in). The process for most notices follows the same path:

Log in with your PAN and password.
Go to e-Proceedings under the "Pending Actions" section.
Find the relevant notice — it will show the section, AY, and response due date.
Select Submit Response and choose the appropriate option (agree, disagree with explanation, provide documents).
Upload supporting documents in PDF format. Name them clearly — "Form16_AY2425", "BankStatement_SBI_FY2324".
Submit and download the acknowledgement. Keep it.

For notices that require a written submission or a hearing (typically 142(1) and 148), the same portal is used but the response is more detailed. This is where having a CA review the draft before submission makes a real difference.

What happens if you ignore an income tax notice

Ignoring a notice does not make it go away. The consequences escalate in stages:

139(9) defective return ignored → your ITR is treated as invalid, you're in default, and penalties under Section 271F may apply.
143(1) demand ignored → the demand stays on record, future refunds get set off against it, and interest accrues under Section 220(2).
142(1) non-response → the assessing officer can complete the assessment ex-parte — without your inputs — and raise a best-judgement assessment, which is almost always higher than actual income.
148 non-response → the assessment proceeds without you, usually resulting in a large demand and further scrutiny.
156 demand ignored beyond 30 days → interest under Section 220(2) accrues at 1% per month. Continued non-payment can lead to attachment of bank accounts or property.

The math is simple: a 30-minute call with a CA costs a fraction of any penalty. If you're confused, get clarity before the deadline, not after.

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Frequently asked

Does receiving an income tax notice mean I did something wrong?

Not necessarily. The majority of notices under Section 143(1) are automated system alerts about a mismatch between your ITR and data the department holds (Form 26AS, AIS). They are not accusations of fraud — they are requests to explain or reconcile a difference. Only notices like Section 148 (reassessment) or Section 133(6) (information request) signal deeper scrutiny.

What is the deadline to respond to an income tax notice?

The deadline varies by notice type. Section 139(9) defective return notices give 15 days. Section 142(1) notices typically give 15–30 days, sometimes with an extension on request. Section 148 reassessment notices give 30 days to object. Section 156 demand notices give 30 days to pay or challenge. The deadline is printed on the notice itself — note it immediately and set a reminder at least 5 days early.

Can I respond to an income tax notice myself without a CA?

Yes, for straightforward notices. A 143(1) intimation with a small agreed demand, or a 139(9) defective return with a technical fix, can be handled through the e-Filing portal by most taxpayers. Where professional help pays: 148 reassessment notices, large disputed demands, complex income situations (capital gains, business income, foreign assets), or when the deadline is very close and you don't understand the notice.

What is a Section 143(1) notice?

Section 143(1) is an intimation — a summary of how the Income Tax Department has processed your return. It may show your computation matches theirs (no action needed), a refund due, or a tax demand where their figures differ from yours. It is the most common notice and does not mean your return has been selected for scrutiny. Responding correctly — either paying the demand or filing a rectification if you disagree — closes the matter.

What is a Section 148 notice and how serious is it?

Section 148 is a reassessment notice. It means the assessing officer has reason to believe income from a prior year was not assessed properly — often because of information from a third party (bank, registrar, company) that doesn't match your declared income. The look-back period is typically 3 years, and up to 10 years for income above Rs 50 lakh or foreign assets. This is one of the more serious notices — professional help from a CA is strongly recommended.

What documents should I gather when I receive an income tax notice?

Start with your ITR acknowledgement for the relevant assessment year, Form 26AS and AIS for that year, Form 16 or 16A from your employer(s), bank statements showing interest income, capital gains statements from your broker, and any receipts for deductions claimed (80C, 80D, HRA). Having these before you read the notice carefully means you can check in real time whether the department's concern is valid or an error on their side.

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