Published Jul 28, 2025 2 Min Read

What is Income Tax Notice?

Receiving an income tax notice can be an unsettling experience for many taxpayers. Whether due to a mismatch in declared income, delayed filing, or inaccuracies in tax returns, such notices demand immediate attention and action. According to recent data, millions of notices are issued annually by the Income Tax Department in India, highlighting the importance of compliance with tax laws.

In this detailed guide, we will explain what an income tax notice is, its types, common reasons for receiving one, and actionable steps to address it. Additionally, we will discuss how Bajaj Finserv Home Loan can help you manage your finances effectively during tax-related challenges. Get started by entering your mobile number and OTP to check your home loan offer instantly.


What is income tax notice?

An income tax notice is a formal communication from the Income Tax Department to an assessee (taxpayer). It is usually issued when there is a discrepancy, error, or doubt related to tax filings, payments, or other financial transactions. The notice may request additional information, clarification, or corrective action.

Such notices are not always indicative of wrongdoing; they often serve as reminders or queries to ensure compliance with tax regulations.


Types of income tax notices

Notice under Section 142(1)

This notice is issued to gather information for tax assessments. It may request specific documents or explanations regarding income, deductions, or claims made in your Income Tax Return (ITR).

Notice sent under Section 139(9)

This notice is issued when your ITR contains errors or is considered defective. It provides an opportunity to rectify the issues within the stipulated time frame.

Notice under Section 148

Issued when the department believes that income has escaped assessment, this notice requires you to refile your ITR for the relevant assessment year.

Notice sent under Section 156

Commonly referred to as a demand notice, this is issued when there is an outstanding tax liability. It specifies the amount due and the deadline for payment.

Intimation under Section 143(1)

This is not technically a notice but an intimation of discrepancies found during the preliminary assessment of your ITR. It may highlight refunds, tax demands, or mismatches in income details.

Notice under Section 143(2) for scrutiny

This notice is issued for a detailed scrutiny of your ITR. It requires you to provide supporting documentation and explanations for specific claims or deductions.

Assessment under Section 143(3)

This notice is issued after completing a detailed assessment of your tax return. It may result in a demand for tax payment or confirmation of tax refunds.

Notice under Section 131

Issued when the department suspects tax evasion, this notice empowers authorities to summon you for an inquiry or investigation.

Notice under Section 245

This notice informs you about the adjustment of refunds against outstanding tax liabilities.


Most common reasons for receiving an income tax notice

1. Mismatch in income or tax details

Discrepancies between declared income and income reported by third parties (e.g., employers or banks) often trigger notices.

2. Non-filing or delayed filing of ITR

Failure to file your ITR within the deadline or missing mandatory filing requirements may result in a notice.

3. Use of incorrect ITR form

Using the wrong ITR form for your income type can lead to defective filings and subsequent notices.

4. High-value transactions

Large financial transactions, such as property purchases or investments, may attract scrutiny if not properly disclosed in your ITR.

5. Investments in spouse’s name

Investments made in a spouse’s name without proper documentation can raise suspicions and lead to inquiries.

6. Inaccurate reporting of capital gains

Errors in reporting capital gains from property sales, stocks, or mutual funds often result in notices.

7. Incomplete documentation

Failure to provide required documentation for deductions, exemptions, or claims can trigger queries from the department.

8. Random scrutiny

The Income Tax Department may randomly select cases for scrutiny to ensure compliance.

9. Omission of income

Not reporting certain income sources, such as freelance earnings or interest income, can lead to notices.

10. Outstanding tax liability or refund adjustment

Unpaid taxes or adjustments to refunds against liabilities can result in demand notices.

11. Non-payment of self-assessment tax suspected

If self-assessment tax payments are missed or underpaid, you may receive a notice for clarification or payment.


What to do after receiving an income tax notice

Read the notice carefully

Understand the reason for the notice and the actions required.

Verify the details

Ensure the notice is addressed to you and that the information matches your tax records.

Identify the issue or discrepancy

Determine the specific reason for the notice, such as mismatched income or missing documentation.

Check online on the e-Filing Portal

Log in to the Income Tax Department’s e-Filing Portal to view the notice and respond accordingly.

Respond within the time limit

Adhere to the deadline mentioned in the notice to avoid penalties.

Support your response with proper documentation

Provide accurate and complete documentation to address the issues raised in the notice.


Legal consequences of ignoring an income tax notice

Ignoring an income tax notice can lead to severe consequences, including:

  • Monetary penalties
  • Interest accumulation on unpaid taxes
  • Prosecution for tax evasion
  • Freezing of bank accounts or assets

Compliance is essential to avoid such repercussions and maintain your financial credibility.


Essential documents to respond to an income tax notice

Prepare the following documents to respond effectively:

  • PAN card and Aadhaar card
  • ITR acknowledgment receipts
  • Form 16 or Form 16A (for salaried individuals)
  • Bank statements and investment proofs
  • Details of high-value transactions
  • Supporting evidence for deductions and exemptions

 

How to verify a notice or order issued by the Income Tax Department (ITD)

To authenticate a notice:

  1. Visit the Income Tax Department’s e-Filing Portal.
  2. Log in using your credentials.
  3. Navigate to the “Notice/Order Issued by ITD” section.
  4. Enter the document identification number (DIN) mentioned in the notice.
  5. Verify the details online to ensure the notice is genuine.

 

Conclusion

Receiving an income tax notice need not be a cause for panic. By understanding the type of notice, identifying the issue, and responding promptly, you can resolve discrepancies and ensure compliance.

If you are facing financial challenges due to tax liabilities, consider Bajaj Finserv Home Loan as a solution. With competitive interest rates starting at 7.49%* p.a, flexible tenure options, and a simplified application process, Bajaj Finserv Home Loan can help you manage your finances efficiently. Use the EMI calculator to plan your repayment and apply online today.

Frequently asked questions

What is an Income Tax Notice?

An income tax notice is a formal communication from the Income Tax Department requesting clarification or corrective action related to your tax filings.

 

Why did I receive an Income Tax Notice?

You may receive a notice for reasons such as mismatched income details, delayed filing, or incomplete documentation.

 

How should I respond to an Income Tax Notice?

Read the notice carefully, verify the details, identify the issue, and respond online within the stipulated time frame.

 

Can I ignore an Income Tax Notice?

No, ignoring a notice can result in penalties, interest accumulation, or legal action.

 

How can IndiaFilings help me with an Income Tax Notice?

IndiaFilings can assist with professional guidance, documentation, and timely responses to notices.

 

What types of notices can I receive from the Income Tax Department?

Notices under Sections 142(1), 139(9), 148, 156, 143(1), 143(2), 143(3), 131, and 245 are common.

 

How can I verify if the notice is fake or fraudulent?

Use the e-Filing Portal to authenticate the notice by entering the document identification number (DIN).

 

Can I file a revised return after receiving a notice?

Yes, you can file a revised return if the notice allows rectification of errors or discrepancies.

Show More Show Less

Bajaj Finserv App for All Your Financial Needs and Goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals. 

You can use the Bajaj Finserv App to: 

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more. 
  • Explore and apply for co-branded credit cards online. 
  • Invest in fixed deposits and mutual funds on the app. 
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers. 
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions. 
  • Apply for Insta EMI Card and get a pre-approved limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Low Cost EMIs. 
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators 
  • Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Disclaimer

1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (NBFC) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.

2. All other information, such as, the images, facts, statistics etc. (“information”) that are in addition to the details mentioned in the BFL’s product/ service document and which are being displayed on this page only depicts the summary of the information sourced from the public domain. The said information is neither owned by BFL nor it is to the exclusive knowledge of BFL. There may be inadvertent inaccuracies or typographical errors or delays in updating the said information. Hence, users are advised to independently exercise diligence by verifying complete information, including by consulting experts, if any. Users shall be the sole owner of the decision taken, if any, about suitability of the same.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more