Understanding Income Tax Notices in India: Complete Guide on Types, Deadlines, and How to Respond

Every year, millions of Indians file their income tax returns. But for some taxpayers, the process does not end after hitting the “submit” button. The Income Tax Department often issues notices to ensure accuracy, transparency, and compliance with the law.

Receiving such a notice can cause anxiety. But not all notices are negative. Many are simply intimation letters pointing out calculation errors or requesting additional documents. What’s important is to recognize the type of notice, its purpose, and the action you need to take.

In this guide, we’ll explore:

• Why income tax notices are issued

• Different types of notices under the Income Tax Act, 1961

• Time limits for each type of notice

• Best practices on how to handle them

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Why Do Taxpayers Receive Notices?

The Income Tax Department relies on multiple data sources—your employer, banks, mutual funds, property registrars, and even foreign transactions. If any inconsistency or unusual activity is spotted, the system may trigger a notice. Common reasons include:

• Non-filing of ITR despite having taxable income.

• Mismatch in information between ITR and Form 26AS or AIS.

• Wrong claims for deductions or exemptions.

• Underreporting of income, like foreign assets or capital gains.

• Arithmetical mistakes in return filing.

• Scrutiny selection for a detailed check (random or suspicious).

Some notices are routine checks, while others are serious reassessment or demand orders.

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Key Types of Income Tax Notices

1. Notice Under Section 142(1): Pre-Assessment Inquiry

This is often the first stage in the assessment process.

• When issued?

  • If the Assessing Officer (AO) needs additional details before completing the assessment.

  • If you haven’t filed your ITR when required.

• Purpose:

  • To ask for supporting documents like salary slips, bank statements, or proof of investments.

  • To compel non-filers to submit their returns.

• Deadline to respond: Usually 15–30 days.

• Impact of ignoring: May lead to penalties, prosecution, or ex-parte assessment.

👉 Even if you believe the requested information is irrelevant, you must still respond.

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2. Notice Under Section 143(2): Scrutiny Assessment

This is a deeper review notice. It means your return has been selected for scrutiny.

• When issued?

  • If the AO isn’t satisfied with documents submitted under Section 142(1).

  • Within 3 months from the end of the financial year in which the return was filed.

• Why issued?

  • To check underreporting, false claims, or misreporting of income.

  • Sometimes as part of random selection for quality checks.

• What to do?

  • Submit all requested documents promptly.

  • Maintain transparency—any concealment may worsen the situation.

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3. Notice Under Section 148: Income Escaping Assessment

One of the most critical notices, issued when the AO believes your income has escaped assessment.

• Pre-steps required by AO:

  • An inquiry under Section 148A, with prior approval of higher authorities.

  • The taxpayer is allowed to explain their case within 7–30 days.

• Time limits:

  • Within 3 years and 3 months from the end of the relevant year.

  • If suspected tax evasion exceeds ₹50 lakh, up to 5 years and 3 months.

• Purpose:

  • To reassess income that wasn’t reported earlier.

👉 Strong documentation is crucial here. If ignored, the AO may reassess and impose heavy penalties.

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4. Notice Under Section 156: Demand Notice

This is a straightforward demand for payment.

• Issued after: Completion of assessment, if extra tax, penalty, or interest is due.

• Payment deadline: 30 days from receipt of notice.

• Penalty for non-payment:

  • 1% monthly interest (or part thereof).

  • Risk of penalty proceedings.

👉 If you disagree, you can appeal. But at least 20% of the demand must be paid upfront before appeal proceedings.

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5. Notice Under Section 139(9): Defective Return

Sometimes, the return itself is invalid because of errors.

• Reasons include:

  • Using the wrong ITR form.

  • Missing important details.

  • Mistakes in tax computation.

• Deadline to fix: Usually 15 days.

• Consequence of ignoring: Your ITR will be treated as invalid, and you may have to file afresh.

👉 Always re-check the acknowledgment number and file a corrected return.

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6. Intimation Under Section 143(1): Preliminary Assessment

Technically not a notice but an intimation.

• Purpose:

  • To highlight arithmetic errors, mismatches in TDS, or wrong deductions.

  • To inform you about tax payable or refund due.

• Timeline: Sent within 9 months of the financial year’s end.

👉 Many taxpayers receive this every year. Treat it as a routine communication unless it demands further action.

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Time Limits for Issuance of Notices

Section	Nature of Notice	Time Limit to Issue	Response Time
142(1)	Inquiry before assessment	Before completion of assessment	15–30 days
143(2)	Scrutiny	Within 3 months of FY-end	As specified
148	Income escaping assessment	3 years 3 months (normal) / 5 years 3 months (if > ₹50 lakh evasion)	7–30 days
156	Demand	After assessment	30 days
139(9)	Defective return	Soon after return is filed	15 days
143(1)	Intimation	Within 9 months of FY-end	As specified

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What To Do After Receiving an Income Tax Notice

1. Stay calm and don’t panic. Notices are often routine and solvable.

2. Read carefully—identify the section and type of notice.

3. Cross-check with your ITR and Form 26AS/AIS. Many mismatches are clerical.

4. Gather supporting documents—salary slips, TDS certificates, bank statements.

5. Respond online via the income tax portal within the specified deadline.

6. Consult a professional—especially for scrutiny or reassessment cases.

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How to Avoid Getting Notices in the First Place

While you cannot eliminate the risk completely, you can reduce the chances:

• File your ITR before the due date.

• Use the correct ITR form applicable to your income type.

• Report all income sources, including freelance earnings, capital gains, or foreign income.

• Cross-check with Form 26AS, AIS, and TIS before filing.

• Keep proof of deductions and exemptions claimed.

• Avoid rounding errors or misreporting figures.

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Final Thoughts

Income tax notices are a normal part of India’s tax system. They help maintain transparency and ensure compliance. Many notices are simply clarifications or corrections, not punishments.

The key is to:

• Understand the notice,

• Respond within deadlines, and

• Maintain proper financial records.

If handled carefully, most notices can be resolved without penalties. And if you ever feel lost, professional help from a tax expert can make the process smoother.

In taxation, being proactive, transparent, and timely is the best way to stay stress-free.