How to Respond to an Income Tax Notice in India: A Step-by-Step Guide

An income tax notice can feel alarming, but most are routine and resolvable without a tax professional. Ignoring one can turn a minor issue into a tax demand with interest and penalties. This guide tells you how to identify which notice you have received, what it means, and exactly what steps to take.

First — identify the type of notice

Every notice has a section number. This tells you what the Income Tax Department is asking about. Common notices and what they mean:

Section 139(9) — Defective ITR notice

The department processed your ITR but found it defective — for example, you omitted a schedule, reported a tax liability that does not match the computation, or left out income that appears in AIS. This is the most common notice and the easiest to fix.

Section 143(1) — Intimation

This is not a notice demanding action. The department processed your ITR and calculated tax. If you see a demand amount, it means tax was outstanding after your payment and TDS. If it shows a refund, the department owes you money.

Section 148 — Income escaping assessment

The department believes income that should have been taxed has not been assessed. This is more serious than a 139(9) notice. The department must provide a reason in writing for why it believes income escaped assessment.

Section 156 — Tax demand notice

The department has determined you owe tax and is demanding payment. This notice specifies the amount, the reason, and the deadline for payment or appeal.

Section 271(1)(b) — Penalty notice

A penalty is being imposed, typically for not filing on time, not maintaining adequate records, or not responding to an earlier notice.

Section 245 — Set-off of refund against existing demand

The department wants to adjust your pending refund against an earlier tax demand you have not paid.

Step 1 — Read the notice carefully

Before doing anything else:

• Note the section number (the heading of the notice states it)
• Note the deadline for response (usually 30 days from the date of the notice)
• Note the assessment year the notice relates to
• Check whether the notice is in your name and PAN — a notice for someone else may indicate an identity issue
• Note every amount, demand, or discrepancy mentioned

Do not ignore a notice because it looks routine. Even a Section 143(1) intimation can become a demand if you do not respond to discrepancies it flags.

Step 2 — Log in to the Income Tax e-filing portal

All notices are now sent electronically to your Income Tax portal account at incometax.gov.in. You respond to most notices through the portal:

1. Log in at incometax.gov.in with your PAN and password.
2. Go to e-File → Pending Actions → Notice / Order.
3. Select the notice you want to respond to.
4. Choose the appropriate response type (see below).

If you received a physical notice, check the portal — an electronic copy will be there.

Step 3 — Respond within the deadline

Most notices give you 30 days to respond. This deadline is strict. If you miss it, the department can proceed with the assessment in your absence, which typically means an unfavourable outcome.

If you need more time:

You can request an extension by filing a condonation application explaining why you need more time. This is granted at the Assessing Officer’s discretion and works best when you have a genuine reason (hospitalisation, natural disaster, etc.).

If you disagree with the notice:

Do not stay silent because you think the notice is wrong. File a response explaining your position with supporting documents. The department reviews responses before passing any assessment order.

Step 4 — Gather your documents

Before responding, collect:

• Your ITR acknowledgment for the relevant assessment year
• Form 16 from your employer (salaried persons)
• Form 26AS or AIS showing TDS deducted and income reported
• Bank statements for the year
• Investment proof and deduction receipts (if claiming 80C, 80D, etc.)
• Any contracts, invoices, or agreements relevant to the disputed income
• Correspondence with the other party (for AIS disputes about wrong income)

Step 5 — File your response

For a Section 139(9) defective ITR notice:

Go to e-File → Rectification Request on the portal. Select the ITR that was marked defective and submit a revised return correcting the error. The most common fixes are adding missing schedules, correcting income heads, and reconciling AIS data with your filed return.

For a Section 148 income escaping assessment:

You have the right to:

1. Request the reasons for the notice in writing (the department must provide them)
2. Present your case — submit a written response showing that the income was already assessed or does not exist
3. Request a personal hearing if the issue is complex

The Assessing Officer issues a draft assessment order. You can object to theAO’s order with the Commissioner of Income Tax (Appeals) within 30 days.

For a Section 156 tax demand notice:

Pay the demanded amount through the Income Tax portal under e-Pay Tax (Challan 280). After payment, submit the proof of payment with your response. If you believe the demand is wrong, file an appeal with the CIT(A) within 30 days of the notice.

For a Section 245 set-off notice:

If you agree to the set-off, no action is needed — the department processes it automatically when your refund is processed. If you disagree (for example, if the old demand is already paid), submit evidence of payment and contest the set-off.

Step 6 — Follow up and keep records

After submitting your response:

• Check the portal for updates every 2–3 weeks.
• Note the reference number you receive when you submit a response — keep this for your records.
• If the department requests additional documents, submit them promptly.
• If you receive an assessment order you disagree with, file an appeal with the CIT(A) within 30 days. Missing this deadline means the assessment order becomes final and much harder to challenge.

Common notice types and what to do

Notice because AIS shows income you did not report:

This usually arrives as a Section 139(9) notice. If the income in AIS belongs to someone else (wrong PAN, duplicate entry), file a revised return and also submit a dispute request in the AIS portal. Keep copies of all communications.

Notice because your ITR shows lower income than AIS:

The department uses AIS as a benchmark. If your ITR and AIS match, the notice is less likely. Respond with bank statements and proof that the AIS entry is wrong or that the income was already reported differently.

Notice for a year you did not file ITR:

If you received a notice for a financial year you did not file an ITR, file it immediately. The deadline for filing is usually 31 July of the assessment year (31 October for a tax audit case). If the deadline has passed, file as soon as possible and explain the delay in your response.

Notice because a client did not deduct TDS:

If you received a notice about TDS that should have been deducted but was not, the notice may ask you to pay the tax on that income. Pay the tax and file your ITR correctly. You can also recover the shortfall from the client separately.

How to avoid tax notices in future

The best protection against notices is accurate, complete ITR filing:

• Download and review your AIS on incometax.gov.in before filing your ITR each year.
• Reconcile Form 26AS with your bank statements and invoices.
• File on time — late filing attracts a penalty of ₹5,000 under Section 234F.
• Declare all income including freelance income, interest, rental income, and capital gains even if TDS was deducted on it.
• If you receive an AIS dispute confirmation, update your ITR accordingly.

Frequently asked questions

I received a notice but I disagree with it. Can I ignore it?

No. Ignoring a notice does not make it go away. The Assessing Officer can proceed with a best judgment assessment in your absence, which typically results in a higher tax demand than if you had responded. Always respond, even if you disagree.

I received a notice for a very old assessment year. Is this valid?

Income tax assessments can generally be reopened within 4 years of the end of the relevant assessment year (longer for higher-value cases involving fraud). If the notice relates to a year more than 4 years ago, the department must provide specific reasons for the reopening. Raise this in your response.

Do I need a CA to respond to a tax notice?

For a routine Section 139(9) notice where you know the error, you can respond yourself through the portal. For Section 148 notices, demands involving complex income issues, or cases where penalties are involved, a chartered accountant can help present your case correctly and negotiate with the department.

The notice asks me to appear in person. Do I have to?

For routine notices, physical appearance is not usually required. Submit your written response with supporting documents through the portal. If the notice specifically requests your presence and you cannot attend, request an alternative date or submit a written representation.

Sources

• Income Tax e-filing portal at incometax.gov.in (verified 2026-10-08)
• Income Tax Act 2025, Section 139(9) (Defective return)
• Income Tax Act 2025, Section 143(1) (Intimation)
• Income Tax Act 2025, Section 148 (Income escaping assessment)
• Income Tax Act 2025, Section 156 (Notice of demand)
• Income Tax Act 2025, Section 245 (Set-off of refund)
• Income Tax Act 2025, Section 271(1)(b) (Penalty for default)
• Income Tax Act 2025, Section 234F (Penalty for late filing)