How to Respond to Income Tax Notice from the Income Tax Department: A 2026 Guide

A notice from the Income Tax Department is not an accusation. Most are triggered by a mismatch, a missing disclosure or an arithmetic difference, and most are resolved by a clear reply with the right documents attached.

What causes real damage is guessing. Every notice is issued under a specific provision, and each carries its own deadline, its own reply route and its own consequence for silence. A notice that needs 15 days gets treated like one that allows 30, or a demand notice is answered on the portal while recovery quietly begins in the background.

This guide covers how to identify what you are holding, what to check before you reply, how to respond through the portal, and where each type of notice can lead.

A Note on Section Numbers

The Income-tax Act, 2025 came into force on 1 April 2026 and renumbered the entire statute. Notices for earlier years continue to be issued and dealt with under the 1961 Act numbering, so both sets are in circulation.

Some mappings worth knowing:

Throughout this guide we use the section numbers you will see on the notice itself. Where your notice relates to a year from 2026-27 onwards, check the corresponding provision in the new Act before drafting.

What Is An Income Tax Notice?

An Income Tax notice is sent to taxpayer to inform them about any inconsistency, error, or lack of information that may have been found during the assessment of their income tax returns. When you receive a notice from the Income Tax Department, you are required to respond to the notice within a stipulated time frame. Below, we will discuss how to answer income tax notice.

What Are The Most Common Causes Of Notice from Income Tax Department? Top 10 Common Reasons

Before we answer how to give reply to income tax notice, take a look at this list to understand some common reasons behind why you may receive an income tax notice. It includes:

1. You have failed to file your income tax return.

2. The income tax return filed is inaccurate.

3. If you have failed to declare any income.

4. If you have filled in the incorrect form to file your income tax return.

5. There are inconsistencies in the reported amount of TDS.

6. You have failed to submit all required paperwork for ITR.

7. If you have investments in your spouse’s, however, you failed to report it on your ITR.

8. If the income tax officer decides to examine your income tax return for any reason.

9. If you have received long-term capital gains from investing in stocks but not reported in ITR.

10. If there were high-value transactions within the financial year that were not included in your Income Tax Return.

 Recommended: Why Your Business Needs A Financial Advisor In Gurgaon

The Different Types of Income Tax Notices

The income tax notice can be of different types. It is important to know the type of income notice you have received to know how to reply notice of income tax appropriately:

1. Section 143(1), intimation

The most common communication of all, and often not a notice at all. It sets out the department's computation against yours and shows a refund, a nil position, or a demand.

What to do. Compare line by line against your return. If it is correct, act on it. If it results from an error on either side, file a rectification or a revised return as appropriate, and respond on the portal within the window stated.

If you ignore it. Any demand shown becomes payable and can be recovered, and an incorrect refund adjustment stands.

2. Section 139(9), defective return

Your return has been treated as defective, typically for a missing schedule, an unfilled mandatory field, or accounts not attached where required.

What to do. Correct and resubmit within the 15-day window stated, or seek an extension before it expires.

If you ignore it. The return can be treated as never filed, which exposes you to late filing consequences and can cost you carry-forward of losses.

3. Section 142(1), enquiry before assessment

The officer wants your return filed, or wants specific information, accounts or documents.

What to do. Supply exactly what is asked, indexed, by the date stated. If you need more time, ask in writing before the date rather than after.

If you ignore it. Best judgment assessment becomes available to the officer, along with penalty exposure, and non-compliance is recorded against you for the rest of the proceeding.

4. Section 143(2), scrutiny

Your return has been picked up for detailed examination under Section 143(3). This is a full assessment, not a query.

What to do. Treat it as the beginning of a case that may run for years. Reconcile everything before responding, keep submissions issue-wise and documented, and answer every questionnaire within time. What you say here shapes any later appeal.

If you ignore it. The assessment proceeds on the material available, additions get made unopposed, and you carry a weak record into appeal.

5. Section 148 and 148A, reassessment

The highest-stakes notice on this list. The department believes income has escaped assessment and proposes to reopen a completed year.

What to do. Check limitation first. The ordinary outer limit is three years and three months from the end of the relevant assessment year, extending to five years and three months only where the escaped income is ₹50 lakh or more and is evidenced by specified material. Then demand the information relied on, and attack borrowed satisfaction if the officer has simply reproduced portal or investigation data without linking it to your facts.

Reassessments are overwhelmingly defeated on the reopening itself rather than on merits, and every one of those grounds must be preserved in your reply at the show cause stage. Our detailed guide on how to respond to a Section 148 or 148A reassessment notice sets out the arguments and the 2026 case law.

If you ignore it. Reassessment proceeds ex parte, and the jurisdictional objections you never raised are far harder to run later.

6. Section 156, notice of demand

A demand for tax, interest or penalty, generally payable within 30 days.

What to do. This is where most taxpayers make an expensive mistake. Filing an appeal does not stop recovery. If the demand is material and you intend to contest it, file a stay application alongside the appeal, and do it inside the 30-day window before you are treated as being in default.

The 20 per cent figure you may be told about is administrative, not statutory, and courts have repeatedly held it is not mandatory. Our guide on how to get a stay of demand under Section 220(6) explains what a proper application must establish.

If you ignore it. Interest runs, and recovery can move to bank attachment, refund adjustment and third-party notices.

7. Section 245, adjustment of refund

The department proposes to set your current-year refund against an earlier demand.

What to do. Respond within the window stating whether you agree, partly agree or disagree, with reasons. Check whether the earlier demand is even valid, because stale and already-settled demands appear here regularly.

If you ignore it. Silence is treated as agreement and the adjustment goes through.

8. Section 131, summons

The officer requires your attendance, or production of documents, on oath.

What to do. Attend. A representative can assist and be present, but where personal attendance on oath is required it cannot be delegated. Prepare the documents, and do not guess at figures under questioning.

If you ignore it. Non-attendance carries its own consequences and hardens the officer's view of the case.

9. Penalty notices

Penalty proceedings are separate from the assessment and carry their own notice, their own reply and their own appeal.

What to do. Never assume your assessment appeal covers the penalty. Respond separately, and address characterisation directly, because the gap between under-reporting and misreporting treatment is very large.

Read Also: A Complete Guide to Tax Filing for Foreign Companies in India

What Should Be Done After Receiving An Income Tax Notice?

Before you respond to a notice issued by the Income Tax Department, there are a few important steps you should follow to ensure that the notice sent is not a defective notice. You should always authenticate the Income Tax Notice before you respond to it. This is what you should do after receiving an income tax notice:

• Read every detail given in the notice to understand why it was sent to you.
• Check the basic personal details, such as your name, address, and PAN number.
• Check the assessment year mentioned in the notice.
• Determine the reason(from previous sections of blogs) to find out why the department sent the notice.
• Respond to the income tax notice within the mentioned deadline.
• Double-check the income tax notice to ensure that all details are accurate.
• Be sure to check that the income tax notice response reflects in your income tax account.

Documents Required to Reply to an Income Tax Notice

Keeping your documentation ready helps you stay prepared and lets you double-check for any missing documentation. The following are the basic details you need to provide when you reply to an income tax notice:

• A copy of the Income Tax Notice you received
• PAN card and Aadhaar card details
• Salary Receipts
• TDS Certificate is required for Form 16, Part A
• Investment proofs (if applicable)
• Proof of Income for Form 16, Part B

If you need further assistance, you can contact the top tax consultants at DSRV India. In the next section, we will discuss how to respond to income tax notice online. 

How to Respond to Income Tax Notice Online with Income Tax Portal

After you get a notice from income tax authorities, you need to respond to the notice as soon as possible. The top chartered accountant firms in Gurgaon will explain how to reply income tax notice online using the e-filing portal:

Step 1: Visit the official income tax portal on the website incometaxfiling.gov.in and log in.

Step 2: Click on “e-proceedings” under the “pending options” menu. It will consist of notices that have been issued to you and a detailed overview of all actions taken in relation to it.

Step 3: Click on the links which have been sent over email. The messages related to the proceedings will be visible.

Step 4: Click on “Submit Response” under the “Response” tab for each email that requires you to submit a response. If the demand is correct, you will be given different options depending on whether or not you have paid the amount. Depending on the requirement, choose between “partial response” and “full response”.

Step 5: Open the notice you will receive and then click on “Submit Response”, where you will be able to respond to outstanding demand of the notice.

Step 6: Within the textbox, write a detailed response of not more than 4000 words in the area near remarks/response. 

Step 7: You will be required to upload a cover letter or any other annexures as proof.

Step 8: Tick the checkbox to agree that all information you provided is accurate.

Step 9: Lastly, you have to e-verify your identity by clicking “yes” along with a digital signature.

Read More: Income Tax Notice Reply Format : A Comprehensive Guide To ITR

Is It Mandatory To Respond To The Demand Notice?

Now that you know how to respond to income tax notice, it's also important to know why you should file your income tax return. It is mandatory to file your income tax return before the stated deadline for the following reasons:

• If you earn more than 2.5 lakhs per annum, which is the basic exemption limit.
• If you need a refund for excess income tax that you may have paid.
• If you have financial assets outside the country.
• If you are an NRI and have an income of more than 2.5 Lakh Rupees per annum in India.
• Foreign companies who are making cross-border payments in India.

If you file your ITR late, then it may result in a financial penalty. Not filing your ITR is a punishable offense under Section 276CC of the Income Tax Act and can lead to imprisonment of up to 7 years. The period of imprisonment depends on your tax liability.

How DSRV India Helps

DSRV and Co LLP responds to income tax notices across the full range, from intimation and scrutiny through to reassessment and penalty, prepares stay applications alongside appeals, and represents clients before the CIT(A), the DRP and the ITAT as part of our income tax litigation practice.

We have been in practice from Gurugram since 1987. Send us the notice early: the reply is where the case is decided.

Conclusion

It is necessary to respond to income tax notices as soon as possible, to ensure you remain in compliance with law and order. Failure to respond may result in strict action from the income tax department. 
Are you looking for an income tax consultant in Gurgaon to personally guide you through the process? Then contact DSRV India, one of the top chartered accountant firms in Gurgaon.