Filing your income tax return might feel like ticking off the last task on your to-do list, but it’s not always the end of your tax journey. For many honest taxpayers, the unexpected arrival of an income tax notice in their inbox can trigger anxiety.
But before panic sets in, here’s the good news! , provided you respond appropriately and on time.
India Today spoke of CA (Dr) Suresh Surana to decode what these notices really mean, why they’re sent, and what you should do if one lands your way.
In today’s data-driven tax system, the chances of receiving a notice have increased, not because you’re doing something wrong, but because the CA Surana explained, “With enhanced data analytics, information integration (via AIS, TIS, 26AS), and increased reporting obligations, the issuance of notices has become both structured and data-driven.”
The tax system tracks your financial transactions, like your salary, bank interest, stock trades, and mutual fund investments. If something doesn’t match or seems off, a notice might be sent to you for clarification.
But this isn’t necessarily a sign of wrongdoing. Often, the notice is just a formal nudge asking for more information, missing documents, or explaining a mismatch.
Section 143(1): Intimation After Return Processing
This is one of the most frequently issued notices and is sent after your return has been processed. It compares your declared income and deductions with the department’s own data. If everything matches, no action is needed. But if there’s a mismatch, like incorrect TDS or deductions, you may be asked to pay more tax or may receive a refund.
According to CA (Dr) Suresh Surana, “This is a preliminary assessment, not a final order. You still have time to revise your return under Section 139(5) if needed.”
Section 142(1): Inquiry Before Assessment
This is more of an information request. You may receive it if you haven’t filed your return, or if the This can include income details, bank records, or rent receipts.
“Non-compliance can lead to Best Judgement Assessment under Section 144 and may attract penalties or prosecution,” Surana warned.
Section 139(9): Defective Return
This notice appears when your return is found to have issues, like , leaving out income details, or missing tax payment information. You’re usually given 15 days to fix it.
“If not corrected in time, the return is treated as invalid, with consequences as if no return was filed at all,” Surana explained. This could mean losing out on exemptions or carry-forward benefits.
Section 245: Adjustment Against Tax Dues
If you’re due for a refund but still owe tax from previous years, the department can adjust the two. A notice under Section 245 is issued to inform you about this, giving you a chance to accept or dispute the adjustment.
“This adjustment can only be made after a written intimation, and the taxpayer usually has 21 days to respond,” Surana noted. Common reasons for defective returns include incorrect ITR form used, incomplete information, and non-disclosure of tax payment details, he stated.
Section 148: Income Escaping Assessment
This notice is more serious. It’s sent when the department believes that you’ve failed to disclose certain income in past returns. The Assessing Officer must have credible evidence for reopening your case. You’ll be asked to file a fresh return for the year in question, and possibly explain the source of the income in question.
Surana noted that reassessments are governed by Sections 147 to 153 and can involve recalculations of losses or deductions.
The first rule is simple: do not ignore it. Every notice carries a response deadline. Missing it can lead to penalties, disallowance of claims, or even reopening of your case.
Start by logging into the income tax portal and reading the notice carefully. Check under which section it has been issued and verify its authenticity using the Document Identification Number (DIN). If it’s a valid notice, gather all supporting documents, like ITR copies, Form 16, salary slips, bank statements, investment proofs, and submit a clear and complete response through the e-filing portal.
Surana advised, “Taxpayers need to submit a comprehensive and fact-based response via the income tax e-filing portal in accordance with the requirements set out in the notice.”
Further, he added, “Once the response is submitted, retain copies of your reply and acknowledgement receipts. Track the status on the portal and be alert to further updates from the department.”
If you’re not satisfied with the outcome, don’t hesitate to explore remedies. These include seeking a rectification under Section 154, filing an appeal with the Commissioner (Appeals), or requesting a revision under Section 264, depending on your case.
In other words, receiving a tax notice isn’t the end of the world. In most cases, it’s just the department doing its job, cross-checking information and ensuring everything adds up. Staying calm, reading the notice carefully, and responding with the right documents on time can help you resolve it smoothly.
And if you’re ever in doubt, don’t try to guess your way through it. Reach out to a qualified tax professional who can guide you through the process.