Income Tax Notice: Types & How to Respond Without Panicking

Opening an email or SMS about an income tax notice can be alarming — but most notices are routine processing communications, not accusations. The key is identifying which type you've received and responding correctly and on time.

Common types of notices

Section 143(1) — Intimation

The most common notice of all. This is simply an automated intimation after your return is processed, showing whether the department's calculation matches yours. It may show a refund, a demand, or no difference at all. This is not a notice in the alarming sense — it is standard processing confirmation.

Section 139(9) — Defective Return

Issued when your return has an error or missing information — for example, income reported but tax not paid, or a mismatch between schedules. You are given a window to correct and resubmit; if you don't, the return can be treated as invalid.

Section 143(2) — Scrutiny Notice

Means your return has been selected for detailed scrutiny. This does not necessarily mean something is wrong — returns can be picked for scrutiny for various reasons, including random selection. You will need to provide supporting documents and explanations for specific items.

Section 148 — Income Escaping Assessment

Issued when the department believes income was not fully disclosed in a prior year's return. This is more serious and time-sensitive — it typically requires filing a return in response and providing a full explanation.

Section 245 — Adjustment of Refund Against Demand

Sent when the department intends to adjust a refund due to you against an outstanding tax demand from a previous year. You have a window to object if you believe the prior demand is incorrect or already settled.

What to do when you receive any notice

• Don't ignore it. Every notice has a response deadline, and missing it removes options that were otherwise available.
• Identify the exact section quoted in the notice — this determines what response is required.
• Check the assessment year it relates to, not just the year you received it.
• Gather supporting documents relevant to the specific point raised, rather than sending everything.
• Respond through the income tax portal within the stated timeline, in the format requested.

When to get professional help

A 143(1) intimation showing no discrepancy needs no action. But scrutiny notices, defective return notices, and anything under Section 148 are worth having a Chartered Accountant review before you respond — the wording of your reply and the documentation you submit can materially affect the outcome.

Received a notice? Don't wait until the deadline

We help clients interpret notices correctly, prepare the right response, and represent them before the tax authorities where needed. Send us a copy of the notice and we'll tell you plainly what it means and what to do.