An email from the Income Tax Department can be unsettling, but most notices are routine. Many simply ask you to explain a mismatch between your return and the Department’s data, correct a defect, or confirm a payment. Knowing how to respond to an income tax notice calmly and on time usually resolves the matter with little fuss.

Receiving a notice does not mean you have done anything wrong. It means the Department wants information, clarification or action. The key is to understand what kind of communication you have received, what it asks for and by when.

A note on the law. The Income-tax Act, 2025 replaced the Income-tax Act, 1961 from 1 April 2026. According to the Department’s FAQs, matters relating to tax years before 1 April 2026, including proceedings started on or after that date for earlier years, continue under the 1961 Act until finally resolved. Since the first tax year under the new Act is 2026-27, most notices issued during 2026 relate to assessment years governed by the 1961 Act, and the section numbers below refer to that Act. Always use the section cited on your notice.

What Is an Income Tax Notice?

The Department may write to you to seek information or clarification, propose an adjustment to your return, ask you to fix a defective return, start or continue assessment proceedings, communicate an outstanding demand, or flag another compliance requirement. These communications are not all the same:

• Notice: asks you to do something, such as provide information, documents or a response.
• Intimation: informs you of the result of processing your return, which may show a refund, nil or demand.
• Proposed adjustment: gives you a chance to respond before a change is made to your return.
• Order: records a decision, such as an assessment or rectification.
• Demand: states an amount recorded as payable.

Why Might You Receive an Income Tax Notice?

Common reasons include income in your return not matching the Department’s data; TDS or tax credit mismatches; differences with the Annual Information Statement (AIS), Taxpayer Information Summary (TIS) or Form 26AS; interest, dividend, securities or property transactions needing reconciliation; deductions or exemptions requiring evidence; a defective or incomplete return; advance or self-assessment tax payments not matched; an outstanding demand from an earlier year; or requests for information during assessment.

Discrepancies often come from reporting or timing differences, incomplete records or errors in third-party data. A mismatch does not establish tax evasion, and not every AIS or Form 26AS difference leads to a notice.

STEP 1Verify That the Notice Is Genuine

Before responding or sharing information, confirm the notice is real:

• Log in to the official e-Filing portal and check whether the notice appears under Pending Actions or your e-Proceedings.
• Check the issuing authority, reference number, date, assessment year and section cited.
• Look for the Document Identification Number (DIN). Communications issued on or after 1 October 2019 are required to carry a DIN.
• Use the portal’s Authenticate Notice/Order Issued by ITD service, which does not require login and uses the DIN.
• Be wary of unsolicited payment links, messages asking for passwords or OTPs, and emails from unofficial addresses.

The Department’s FAQ states that a communication without a DIN is treated as invalid. If you receive one, verify it carefully and take advice before deciding not to respond.

STEP 2Identify the Type of Notice and the Applicable Law

The right response depends on what the communication is. Common examples (not an exhaustive list), with 1961 Act references:

Intimation or Proposed Adjustment

During processing, the Centralised Processing Centre may propose a prima facie adjustment under section 143(1)(a), for example where a deduction or income figure does not match available data. You can agree or disagree with each proposed adjustment in e-Proceedings. Under the 1961 Act, you have 30 days from the date of the communication to respond before the adjustment may be made.

Defective Return Notice

Under section 139(9), the Department may treat a return as defective, for example if required schedules or details are missing. Under the 1961 Act, you must remove the defect within 15 days of the intimation, or a further period the Assessing Officer allows. You can agree and file a corrected return, or disagree with reasons, through e-Proceedings.

Scrutiny or Assessment Notice

Notices from the Assessing Officer, such as under section 142(1) (calling for information or documents) or section 143(2) (scrutiny assessment), ask specific questions. Answer each one with evidence, not a generic reply.

Reassessment Communication

Communications about income escaping assessment involve detailed procedural rules and time limits. These cases often turn on legal as well as factual issues, so professional advice is strongly recommended.

Outstanding Tax Demand

A demand, or an intimation under section 245 proposing to adjust a demand against your refund, requires you to check whether the amount is correct, already paid or disputed. This is handled differently from an information request (see the demand section below).

Swipe the table sideways to see all columns.

This table is a general orientation guide. Always read the actual notice.

STEP 3Check the Response Deadline Immediately

Find the due date before you start gathering papers. Check the date stated in the notice, any statutory period that applies (such as 15 days for a defective return notice or 30 days for a proposed adjustment under the 1961 Act), and the portal’s submission status. There is no single deadline for all notices.

For notices from the Assessing Officer, e-Proceedings has a Seek/View Adjournment option to request more time, with reasons. Whether an extension is granted is at the officer’s discretion. Do not wait until the last day; portal issues or missing documents can cost you the opportunity to respond.

STEP 4Review the Notice Against Your Tax Records

Gather the records that match the issue raised:

• Filed ITR, acknowledgment and computation of income
• Form 16 and salary slips, if relevant
• Form 26AS, AIS and TIS
• Bank statements and interest certificates
• Dividend, investment, capital gains or property records
• TDS certificates and tax payment challans
• Proof for deductions or exemptions claimed
• Earlier notices, orders and responses on the same issue

You do not need every document, only those that address the questions asked.

STEP 5Determine Whether the Notice Is Correct

Scenario A: the Department is right. For example, you missed fixed deposit interest. Decide on the correct action under the applicable procedure, such as accepting the adjustment or paying the tax, and understand the consequences before you agree.

Scenario B: it is partly right. Separate the correct and incorrect portions, quantify the difference, and provide evidence for the items you dispute.

Scenario C: it is wrong. For example, AIS shows a sale of shares that was actually a transfer between your own accounts. Prepare a factual explanation backed by documents, reconciliations, challans or certificates.

Do not agree to an adjustment or demand you have not checked. Equally, do not dispute a valid demand without a reasonable basis.

STEP 6Prepare a Clear and Evidence-Based Reply

A good response identifies the notice and year, summarises the issue, addresses each point separately, states whether you agree, disagree or partly agree (where the format allows), explains facts and calculations clearly, attaches relevant documents in the prescribed format, cites legal provisions only where necessary, and avoids unrelated explanations or unnecessary personal information.

General drafting structure (not a substitute for the format the portal or notice prescribes):

STEP 7Submit the Response Through the Correct Channel

For most notices, the official e-Proceedings user manual describes this workflow:

1. Log in to the e-Filing portal.
2. Go to Pending Actions > e-Proceedings and choose Self, Authorised Representative or Other PAN/TAN, as applicable.
3. Select the relevant proceeding and notice.
4. Read the response instructions and attachment rules.
5. Choose the response type, for example Agree/Disagree for a 143(1)(a) adjustment or 139(9) defect, or Partial/Full Response for an Assessing Officer notice.
6. Enter your response and upload supporting documents.
7. Complete any declaration or verification step.
8. Submit and save the Transaction ID.

Demands have their own service (below), and some information requests use the portal’s Compliance functionality. Menu names can change, so follow the current portal and the instructions in your notice.

STEP 8Save the Acknowledgment and Track the Status

Submitting is not the end. Save the Transaction ID, download a copy of your response where available, keep uploaded documents and calculations, monitor e-Proceedings and your registered email, respond promptly to any follow-up, and keep a chronological file of notices, replies, orders and payments. The portal lets you view past responses, but you should not assume a submitted response can be edited, so review it carefully before submitting.

How to Respond to an Outstanding Income Tax Demand

A demand needs a different approach from an information notice. Use Pending Actions > Response to Outstanding Demand, as described in the official user manual. Typical situations:

• Demand correct, not paid: select “Demand is correct” and pay through e-Pay Tax.
• Demand already paid: indicate it is paid and add challan details (BSR code, serial number, date, amount) with the challan copy.
• Paid but not reflected: provide challan details so the payment can be matched.
• Disagree in full or part: choose the disagreement option, add reasons with details, and pay any undisputed portion.
• Credit or processing mismatch: explain the mismatch and provide evidence, and consider whether rectification is more appropriate.

The portal warns that once you submit a response accepting the demand as correct, you cannot later disagree with it, so verify the computation first. A demand response is also not the same as an appeal. Rectification requests, appeals and stay applications are separate procedures with their own time limits.

What Happens If You Do Not Respond to an Income Tax Notice?

Consequences depend on the notice and the law. They may include your return being processed with the proposed adjustment, a return being treated as invalid if a defect is not removed in time, further assessment action, the Assessing Officer proceeding on available information, demands with interest, penalties where the law provides, and losing the chance to explain or substantiate your position. Not every consequence applies to every notice.

Missing a deadline does not necessarily mean every remedy is lost. Promptly check whether an adjournment, rectification, appeal, condonation of delay or other remedy is available.

Common Mistakes to Avoid When Replying to a Tax Notice

1. Ignoring the notice because you believe your return is correct. Respond anyway.
2. Confusing an intimation with an assessment or demand. Read the section cited.
3. Missing the deadline. Note it on day one.
4. Using the wrong assessment year or section. Copy them from the notice.
5. Generic explanations. Answer each question specifically.
6. Incomplete or illegible uploads. Check every file before submitting.
7. Not reconciling tax credits. Compare Form 26AS, AIS and challans first.
8. Accepting an incorrect demand. Verify before selecting “Demand is correct”.
9. Disputing a valid demand without evidence. Be realistic.
10. Using unofficial payment links or sharing OTPs. Pay only through the portal.
11. Assuming submission closes the case. Track it until an order or closure.

When Should You Consult a Chartered Accountant or Tax Professional?

Professional help is especially valuable for scrutiny or reassessment proceedings, large or complex demands, disputed deductions or additions to income, business or professional income issues, queries about high-value transactions, notices covering several years, possible penalty or prosecution concerns, missed deadlines, and appeal, rectification or stay questions. A professional cannot guarantee the outcome or eliminate a valid demand, but can help you respond accurately and on time. Learn about our direct tax services and income tax representation and litigation support.

Frequently Asked Questions

Final Checklist Before Submitting Your Reply

• Verify the notice through the official portal and DIN
• Identify the assessment or tax year and governing Act
• Read the issue, deadline and submission instructions
• Reconcile the notice with your return and records
• Decide whether it is correct, partly correct or disputed
• Prepare a point-by-point explanation
• Attach relevant supporting documents
• Review the response and attachments before submitting
• Submit through the prescribed channel
• Save the acknowledgment and track the proceeding
• Seek professional advice for complex legal or factual issues

This article is general information, not advice on any specific notice. The correct response depends on the notice, the applicable law and your circumstances.

Official sources: Income-tax Act, 2025 FAQs · Responding to Notices · e-Proceedings user manual · Response to Outstanding Demand · Authenticate Notice FAQ