Income Tax Notice: Understand These 6 Types of Income Tax Notices – Don’t Panic, Be Informed!
Receiving a notice from the Income Tax Department can be stressful for many people. As soon as a letter arrives, taxpayers often assume they’ve made a big mistake or that they’ll have to pay a hefty fine. But in reality, not every notice is sent with the intention of penalizing you. Often, it is just to provide information or offer you an opportunity to correct a mistake.
If you understand when and why the Income Tax Department sends a notice, and what each type of notice means, you can respond appropriately without fear and resolve the matter smoothly.
Let’s take a detailed look at the 6 major types of notices sent by the Income Tax Department and what each one means:
1. Section 143(1)(a): Intimation Notice
This is known as an "Intimation Notice" and is sent after the department successfully processes your Income Tax Return (ITR). It informs you whether your income, tax, and deduction calculations match the department's assessment or not.
Why it is sent:
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If there is a mismatch between your calculations and the department’s.
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If there is any error in TDS, deductions, or tax calculation.
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If your ITR details don’t match Form 26AS or AIS data.
What to do:
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Check the differences mentioned in the notice carefully.
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You must respond within 30 days from the date of issue.
If there is no mismatch:
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No action is required. It is just an intimation for your records.
2. Section 139(9): Defective Return Notice
This notice is sent when your ITR is found to be incomplete or contains incorrect information.
Common reasons:
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Claiming HRA without showing an HRA component in the salary breakup.
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Claiming TDS on interest income without declaring the interest itself.
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Missing or incomplete income details or documentation.
What to do:
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You must correct the errors within 15 days of receiving the notice.
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You can request an extension if needed.
3. Section 142(1): Inquiry Notice
This notice is sent before assessment or reassessment and is generally used to gather information.
When it is sent:
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If you haven’t filed your ITR despite having income above the basic exemption limit.
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If the department wants clarification or documents regarding your income.
What to do:
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You are required to provide answers and documents as requested.
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There is no fixed time limit for the issuance of this notice.
Important:
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Failing to respond can lead to “Best Judgment Assessment” under Section 144.
4. Section 143(2): Scrutiny Assessment Notice
If your ITR raises suspicion or contains high-value transactions, the department may want to examine it in detail.
Purpose:
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To verify the authenticity of your income, deductions, and exemptions claimed in your ITR.
What to do:
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Submit the requested documents and explanations within 15 days or the time mentioned in the notice.
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This notice is generally issued within 6 months from the end of the assessment year.
5. Section 148: Reassessment Notice
If the department believes that you have failed to disclose certain income in your ITR, they may reassess your case.
Process:
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First, a “Show Cause” notice is issued under Section 148A(b).
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If the response is unsatisfactory or absent, a reassessment notice is issued under Section 148A(d).
Notice time limits:
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If the undisclosed income is less than ₹50 lakh: Within 3 years 3 months from the end of the relevant assessment year.
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If income is more than ₹50 lakh: Within 5 years 3 months.
What to do:
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You must reply within the time period (usually 30 days) mentioned in the notice explaining why reassessment should not be initiated.
6. Section 245: Tax Adjustment Notice
This notice is sent when the department intends to adjust your current year's income tax refund against any outstanding tax dues from previous years.
When it is sent:
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If you have any unpaid tax liabilities from previous years.
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And a refund is due in the current financial year.
What to do:
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The notice will state the amount adjusted.
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If you disagree, you can raise an objection within 30 days.
Conclusion: Don’t Panic When You Receive a Notice – Understand and Respond
An income tax notice doesn’t always mean something serious or negative. In many cases, it’s a procedural formality or an opportunity to rectify an error. The key is to read the notice carefully, understand its meaning, and respond on time.
Some useful tips:
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Every notice has a specific deadline for reply—never ignore it.
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Ignoring notices can lead to penalties, legal action, or loss of refund.
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If you're unsure, always consult a chartered accountant or tax expert.
Remember – a smart taxpayer is an informed taxpayer.
The government tracks every financial transaction, so it's best to file your ITR correctly and honestly. But if you do get a notice, respond wisely instead of worrying.
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