5 Steps to Respond to Income Tax Notice Online

5 Steps to Respond to an Income Tax Notice Online

Got a tax notice and are unsure what to do? This guide breaks it down simply so you can handle it with clarity and confidence.

Written by : Knowledge Centre Team

2026-01-08

2240 Views

11 minutes read

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Any individual or organisation working or operating in India is subject to the Indian Income Tax Act and is required to file information on income and taxes. This information is generally filed annually and is called an Income Tax Return (ITR). As per Indian Income-tax laws, any income earned in a given financial year should be disclosed in the annual ITR.

Key Takeaways

  • Understand the distinction between an intimation and an income tax notice so that you do not get confused and miss the action

  • Learn the top five most common income tax notices and how they end up in your mailbox

  • Answering tax notices is now an instant online procedure, reducing the need to visit the office

  • Even though your income is exempt, you might still have to file an ITR under specific situations

  • Delays or errors in filing may result in hefty fines; on-time compliance ensures your protection

Income Tax Notices

An Income Tax (IT) Notice is sent to inform the tax assessee that their ITR has been selected for scrutiny. The taxpayer (assessee) is required to provide information, correct defects in the return, explain discrepancies, or comply with other proceedings. It is important to note the distinction in terminology: a notice differs from an intimation. 

An intimation (commonly under Section 143(1)) is sent after the return is processed and may show “no demand/no refund” or result in a demand/refund, depending on the processing outcome.

Depending on the notice, action may or may not be required; however, a notice typically requires a response/compliance within the specified timeframe.

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5 Types of Income Tax Notices

Income tax notices can be issued for different reasons, such as correcting a defective return, seeking additional information, initiating scrutiny, raising a demand, or adjusting refunds against outstanding dues, so it’s important to identify the exact section mentioned on your notice before responding.

  1. Defective return (u/s 139(9)): The Department may treat a return as defective due to incomplete or inconsistent information, and it can issue a defective notice u/s 139(9) asking the assessee to rectify the defect within the time specified (often 15 days, or as mentioned in the notice, with an option to seek extension/time).

  2. Intimation after processing (u/s 143(1)): After processing the ITR, an intimation u/s 143(1) may be issued showing no change, a refund, or a demand (including adjustments, where applicable).

  3. Notice for not filing return / seeking information (u/s 142(1)): If a return is not filed, or if the Assessing Officer requires further information, a notice u/s 142(1) may be issued asking the assessee to file the return or furnish details/documents.

  4. Scrutiny selection (u/s 143(2)): If the return is selected for scrutiny, the Department may issue a notice under section 143(2) seeking an explanation and supporting details for claims/discrepancies.

  5. Notice of demand (u/s156): Where any order is passed that results in tax, interest, penalty, fine, or any other sum payable, a notice of demand u/s 156 is issued, and the assessee must pay within the period specified in the notice.
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Did You Know?

In AY 2024-25, the Income Tax Department publicly asked taxpayers to ignore a defective return notice that was wrongly issued on 29 Nov 2024


Source: Economic Times

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How to Reply to an Income Tax Notice?

Generally, the IT department issues notices online nowadays. You can view them by logging in to the Income Tax Department’s e-Filing portal and using the e-Proceedings option to submit your response (where available). Here is a step-by-step guide to log in and respond to a notice for those wondering, “What to do if you get Income Tax Notice?”

Step 1: Visit the Income Tax Department's home page on the Government of India website.

Open - https://www.incometaxindiaefiling.gov.in/home

Step 2: Log in using your credentials. The user ID is your PAN number.

Step 3: Check for any notices. Also, check the ‘Worklist’ tab for actions required to be taken.

Step 4: View ‘Detailed Notices’ and file ‘Response’ by clicking on ‘Submit’. In case of tax demands, the assessee has to select one of the following while submitting a response:

  • Disagree with the demand

  • Demand is correct

  • Demand is not correct, but agree to the adjustment

  • Demand is partially correct

Step 5: Submit and periodically check back to see whether any new follow-up notices request further clarification.

Is it Mandatory to File ITR?

Filing ITR, before the stipulated deadline, is mandatory under the following circumstances:

  • If your income is above the basic exemption slab or limit

  • If you have paid excess income tax and would like to claim a refund

  • You have financial assets or entities outside India, or have signing authority over any account outside India (as applicable).

  • Foreign companies that are eligible for treaty benefits on financial transactions in India

  • You are an NRI with an accrued income of ₹2.5 Lakh in a year in India

Consequences of Late/Non-filing:

Late filing of ITR can attract a financial penalty that depends on the extent of the delay. Wilful non-filing of ITR is an offence under Section 276CC of the Indian Income Tax Act, and the defaulter can be imprisoned for a period anywhere between 3 (three) months to 7 (seven) years, depending on the tax payable.

Learn - which ITR should you file?

Revealing incomes is logical because transaction trails can be easily traced. If you buy a high-value asset, the seller must report the sale. In this case, the IT department may request proof of income. Disclosing this income in the ITR would make it easier to explain. If the source is unclear and not disclosed in the ITR, it may be taxed at special rates (e.g., under Section 115BBE), along with applicable surcharge/cess and penalties as per law.

Why Disclose Income?

Disclosing income is recommended, even for income that is exempt from tax. ITR filing is now easier and more convenient, with online filing. Even the last leg of the process, which involves sending Form V to the IT department, can be done online by doing a simple Aadhar e-verification of the document. The end-to-end process of filing an online ITR is hassle-free and can be completed within a few minutes if you have all your income, investment, and tax details, including 26AS, on hand.

Exempt Income & NIL Returns:

NIL or NA ITR filings apply to people whose taxable income is within the exemption slab. Although filing returns is not mandatory, taxpayers can still do so because the online ITR process is quick and straightforward.

Conclusion

The Indian IT department has undergone a massive transformation in how it manages intimations, notices, and tax demands. You are no longer required to visit the tax officer of your jurisdiction to give or seek clarifications regarding your tax assessment. All transactions are now “faceless” and completed digitally. However, it is important to respond diligently to any notice within the stipulated timeframe. This helps you maintain a clear track record and also fetches you certificates of appreciation from the IT department!

Glossary

  1. ITR: Annual Income Tax Return filed in India to report income, deductions and tax paid
  2. IT Notice: Official communication from the Income Tax Department seeking info, action or clarification
  3. Section 143(1): Intimation after ITR processing, highlighting tax, refund or mismatches
  4. Section 276CC: Penalty/prosecution for wilful failure to file ITR on time
  5. NIL Returns: ITR filed with zero tax payable after income and deductions
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FAQs

In India, section NA in Income Tax indicates that the relevant section of the Income Tax Act, 1961, is not stated or not yet available in the initial email or SMS alert. Section NA of the Income Tax Act is not a valid section in the Act. This is common in system-generated or preliminary alerts. The full notice on the e-filing portal typically cites the correct section (e.g., 143(1), 142(1), or 148), and clarifies the reason and required action.

The Income Tax Department may reassess escaped income for up to 10 years in select cases. Section NA in the Income Tax Act of India is not a provision. An Income Tax Section NA in automated alerts simply means the section was not specified or unavailable at that stage. Such notices rely on valid statutory powers, mainly under Section 148

To reply to an income tax notice, sign in to the e-filing portal, open e-Proceedings or Response to Outstanding Demand, and file your reply with relevant evidence. There is no universal template; the required form fields, details, and documents vary by notice type.

Common Income Tax Notices for salaried individuals typically relate to return processing, mismatches, and compliance, such as:

  • Intimation u/s 143(1) after processing (may show refund/demand/no change).

  • ​Notice/communication for defective return u/s 139(9) if the return is treated as defective and needs correction.

  • ​Scrutiny notice u/s 143(2) in cases selected for scrutiny (less common, but possible).
     

Intimation for set-off of refund against outstanding demand u/s 245 if refunds are adjusted against pending dues.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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