Income Tax Notices

Nifty Share Price News, Mumbai, 17 March 2026: Millions of salaried employees and workers in India file income tax returns (ITR) every year. Most of them file simple ITR-1 or ITR-2 based on Form 16 and TDS. Nevertheless, receiving a notice from the Income Tax Department has become a common occurrence. These notices mainly arise due to discrepancies in data matching (AIS, TIS, Form 26AS), claims for additional deductions, or incomplete information.

For the assessment year 2025-26 (AY 2025-26), even small discrepancies are noticed with the help of data analytics and AI. If responded to on time, penalties, interest, or legal action can be avoided. This article explains in detail the types of income tax notices for salaried individuals, their reasons, the response process, and tips to avoid them.

What is an income tax notice?

An income tax notice is the official letter from the Income Tax Department. It is sent for clarification, documents or payment of additional tax for errors found during the ITR process. These notices come via email, SMS or the e-filing portal (incometax.gov.in).

Ignoring the notice could lead to fines (e.g. up to Rs 10,000), interest or the return being considered invalid. Salaried individuals usually receive notices due to deductions (HRA, 80C), TDS mismatch or incomplete income.

Why do salaried people get income tax notices? (Main reasons)

The main reasons why salaried employees receive notices are as follows:

  • Difference in Form 26AS, AIS and TIS: The salary or TDS amount in the ITR doesn’t match the figures reported by the employer.
  • Excessive or wrong deduction claims: Fake rent receipts for HRA, extra claims in LTA, 80C or mistakes in home loan interest.
  • Showing incomplete income: Not reporting FD interest, rental income, freelance/moonlighting earnings, gifts or crypto/stock gains.
  • High-value transactions: Depositing cash over 10 lakh, buying property over 30 lakh or making large investments
  • Not filing ITR or delay: or not verifying the return.
  • PAN/Name mistake: wrong PAN or name with the employer or bank.
  • Foreign income/assets: Not showing NRI or foreign assets.

Main types of income tax notices for salaried people

The main notices for salaried people are as follows:

1. Notice under Section 143(1) (Intimation)

  • The most common notice.
  • Initial assessment notice that comes after ITR processing.
  • Shows extra tax, refund or adjustment.
  • You have to respond within 30 days.

2. Notice under Section 142(1) (Inquiry before Assessment)

  • After filing the ITR, documents or information may be requested.
  • If you don’t file your ITR, you even get reminders.
  • Possibility of a fine and imprisonment (up to 1 year).

3. Notice under Section 143(2) (Scrutiny Assessment)

  • For full or limited scrutiny.
  • CASS system or manual selection.
  • It happens because of underreporting income, claiming extra deductions, or showing higher losses.
    Faceless assessment process implemented.

4. Notice under Section 139(9) (Defective Return)

  • If there is an error in the ITR (missing info, wrong PAN, mismatch).
  • File the corrected return within 15 days, otherwise the return will be invalid.

5. Notice under Section 148 (Reassessment)

  • If it is found that the income from previous years has been exempted.
  • Applies up to 3 years ago (or in some cases more).

6. Demand notice under Section 156

  • Demand for additional tax, penalty or interest
  • Payment is required within 30 days.

7. Notice under Section 245

  • To adjust the refund against previous dues.
  • Automatic adjustment if no response is given within 30 days.

How to respond to a notice? (Step-by-step guide)

Don’t ignore the notice. Follow the steps below:

1. Check the notice:
Log in to the e-filing portal → Worklist / e-Proceedings → View notice. Note down the section, reason and deadline. If it’s a fraud notice, verify it on the portal.

2. Gather the documents:

  • Form 16, payslip, Form 26AS/AIS/TIS.
  • Proofs for deductions (rental agreement for HRA, tickets for LTA).
  • Bank statement, investment certificates
  • ITR copy

3. Give a response:

  • Click on ‘Submit Response’ on the portal.
  • Choose ‘Agree’ or ‘Disagree’.
  • If you disagree, upload the reason and evidence.
  • Upload a JSON file or PDF.
  • 30 days for section 143(1), 15 days for section 139(9), for others as mentioned in the notice.

4. Payment or correction:

  • If you have to pay tax, use the ITNS 280 challan.
  • If there’s a mistake, apply for rectification under Section 154.

5. In complex cases:

  • Take help from a CA or tax expert. Prepare point-wise answers for scrutiny.
  • After responding, you will get an Ack on the portal. Track the status.

Effective tips to avoid notices

  • Always file ITR after checking AIS/TIS/26AS.
  • Show all income (salary + interest + rent + side income).
  • Only claim valid deductions and keep the evidence.
  • File and verify the ITR on time (31 July).
  • Keep your PAN and name the same everywhere.
  • Keep a record for high-value transactions.
  • Every year, download and check Form 16 and 26AS.
  • Don’t use fake documents to dodge AI scanners.

Conclusion
An income tax notice is an opportunity to correct a mistake or discrepancy, not to impose a penalty. For salaried individuals, these notices usually arise due to minor errors that can be resolved with the right documents and timely responses. Always log in to the e-filing portal to check and consult a Chartered Accountant if needed.

Caution:
This information is for general guidance. Laws can change. For personal cases, contact the Income Tax Department or a professional advisor. For more information, visit incometax.gov.in. This guidance will help you face the notice with confidence!