“Over 82 lakh income tax notices were issued in 2024 — mostly for mismatched data, not fraud.” — CBDT Annual Statistics

Getting an income tax notice is scary — the email subject line itself can freeze your brain.
But here’s the truth: **most notices are routine**, auto-generated, and often triggered by mismatches in AIS, TDS, bank transactions, or high-value spends.

The real danger is not the notice — it’s responding late, responding incorrectly, or ignoring it.

That’s exactly what happened to a marketing executive in Mumbai.
He ignored a “Section 139(9) Defective Return” notice thinking it was a system glitch.
Result:

• His return was treated as “not filed”
• He received a ₹14,000 penalty
• His tax refund was blocked for 9 months

The lesson is simple: **Don’t panic — ACT correctly and quickly.**

Why Did You Receive an Income Tax Notice?

Notices are issued for several reasons:

• Mismatch in AIS/TIS vs ITR
• High-value transactions not reported
• Non-filing of ITR when income exceeds limits
• Cash deposits above thresholds
• Crypto/investment sale not disclosed
• TDS claimed but not appearing in Form 26AS
• Property purchase above ₹50 lakhs
• Defective return (missing details)
• Scrutiny under Section 143(2)

Types of Income Tax Notices — Mobile-Friendly Table

What to Do Immediately (Exact Step-by-Step)

Step 1: Check Whether the Notice Is Genuine

• Official domain ends with @incometax.gov.in
• Cross-check DIN (Document Identification Number)
• Verify notice on IT portal under e-filing → View Notices/Orders

Fake notices are common — fraudsters mimic IT emails to scare taxpayers.

Step 2: Read the Notice Carefully (Don’t Assume)

Focus on:

• Section under which it is issued
• Issue date
• Deadline to respond
• Specific discrepancies mentioned

Missing the deadline automatically goes against you.

Step 3: Download AIS, TIS & Form 26AS

Check for:

• TDS mismatch
• Wrong reporting by banks/brokers
• High-value spends
• Crypto/investment transactions
• Cash deposits
• Rent/RD interest not declared

Step 4: Identify the Exact Problem

90% of notices happen due to:

• Income not reported
• TDS claimed but not reflecting
• Interest income missed
• Capital gains not declared
• Wrong ITR form used
• Mismatch between Form 16 and AIS

Step 5: Prepare Your Response

Your reply must include:

• Explanation for mismatch
• Supporting documents
• Corrected ITR (if required)
• Revised figures

Step 6: Submit Response Online

Go to:

Income Tax Portal → e-Proceedings → Submit Response

• Upload documents in PDF
• Submit revised return if demanded
• Track status regularly

Specific Response Strategy for Each Type of Notice

1. Section 139(9) — Defective Return

Fix the error → File corrected return within time.

2. Section 143(1) — Mismatch Notice

Agree / Partially Agree / Disagree
Provide documents accordingly.

3. Section 143(2) — Scrutiny

Most serious notice; respond with:

• Bank statements
• Investment proofs
• Income proofs
• Expense details (if asked)

4. Section 148 — Reassessment

Requires detailed explanation; often issued for:

• Large cash deposits
• Property purchases
• Crypto transactions
• High-value stock trades

5. Section 245 — Refund Adjustment

If old demand is incorrect → Submit request for re-verification.

Documents Required to Respond to Income Tax Notice

• Form 16 / Form 16A
• Bank statements (6–12 months)
• AIS/TIS/26AS
• Investment proofs
• Capital gains statements
• Property purchase/sale documents
• Loan statements
• Business income books (if applicable)

Penalty Risk If You Ignore a Notice

• Late filing penalty: ₹1,000 – ₹5,000
• Interest under Sections 234A/B/C
• Additional tax demand
• Refund blockage
• Scrutiny or reassessment
• In extreme cases: prosecution (rare)

Ignoring a notice is the fastest way to convert a small issue into a big problem.

Do’s & Don’ts After Receiving Notice

Do’s

• Check authenticity first
• Respond within the deadline
• Match data with AIS/TIS
• Keep digital & physical copies

Don’ts

• Don’t ignore or delay
• Don’t give inconsistent answers
• Don’t upload unrelated documents
• Don’t assume it’s a mistake

Conclusion

Receiving an income tax notice doesn’t mean you did something wrong — it means the system detected a mismatch or requires clarification.
Respond calmly, correctly, and within time.
Most notices get resolved without penalties when handled properly.

Disclaimer

Disclaimer: This blog provides general information about responding to income tax notices in India.
It is not legal or financial advice. The appropriate response depends on personal income details, documents, and assessment records.
Always consult a qualified tax professional or chartered accountant for case-specific guidance.