You've Received an Income Tax Notice. Here's What to Do.

A notice from the Income Tax Department is unsettling, and the instinct is either to panic or to ignore it. Both are wrong. The great majority of notices are system-generated mismatches between the return you filed and the data the department already holds, and they close quietly once you explain the difference.

First: identify what kind of notice it is

The section number printed on the notice tells you almost everything about how serious it is.

• Section 143(1) — an intimation, not really a notice. It is the department's computation of your return. If it matches yours, nothing is required.
• Section 139(9) — your return is defective, usually something missing or inconsistent. Fix and re-file within the time given.
• Section 245 — the department intends to adjust a refund against an old outstanding demand. Respond if the demand is wrong.
• Section 143(2) — your return has been selected for scrutiny. This is a genuine assessment and deserves professional handling.
• Section 148 — income is alleged to have escaped assessment, reopening an earlier year. Take advice before responding.

Second: check it is genuine

Every legitimate notice carries a Document Identification Number, and you can verify it on the income tax portal. Notices also appear in your account under e-Proceedings. Anything demanding payment to a personal account, or arriving only by WhatsApp, is a scam — the department does not collect tax that way.

Third: find the actual discrepancy

Download your Form 26AS and AIS for the relevant year and compare them line by line against what you filed. In our experience the cause is usually one of a small handful of things:

• Savings or fixed deposit interest not declared, because no TDS was deducted on it
• A share or mutual fund sale reported by the broker but omitted from the return
• Two Form 16s from a job change, with the exemption counted twice
• TDS credit claimed in the wrong year
• A deduction claimed without the underlying proof

Fourth: respond with evidence, not explanation alone

A reply that merely asserts your position rarely closes a matter. Attach the underlying documents — bank certificates, broker statements, the correct Form 16 — and set out the reconciliation clearly. If the department is right and you did miss something, the cheapest path is usually to accept it, pay the tax with interest, and close the file rather than contest it.

If it is a scrutiny assessment

A 143(2) scrutiny is a different animal. Submissions are made through the faceless assessment portal, questions arrive in rounds, and how the first response is framed shapes the whole proceeding. This is the point at which professional representation genuinely pays for itself.

Preventing the next one

Before you file next year, download your AIS and reconcile it against your return. Almost every routine notice we see could have been avoided by that one step.

If you are holding a notice right now, send us the PDF. We will tell you what it means and what the deadline is, and we can draft and file the response for you.