Defective Return: What to do if you receive an Income Tax Notice?

Income Tax Income Tax Notices
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“You’ve received an Income Tax Notice.”

This is probably the last thing you’d want after you have filed your ITR.

See, an Income Tax Notice is a communication sent by the ITD telling you that something is not right either with the ITR that you’ve filed, or the amount of taxes you’ve paid. The ITD notifies you via message and e-mail.

Currently, many such notices are being issued to various taxpayers, with ‘defective ITR’ being one of the most common ones.

Now there are various sections under which different types of notices can be issued, and some common scenarios could be:

  • There’s a TDS mismatch, meaning that the TDS claimed in ITR does not match what is reflected in your Form 26AS.

  • You haven’t filed your ITR even if your income was above the basic exemption limit.

  • The income reported doesn’t match with the ITD’s records like 26AS and AIS.

  • You didn’t report incomes like crypto and foreign income.

  • ITD needs additional proof for the deductions you’ve claimed.

Now, if you actually end up getting a tax notice, here’s what you need to do.

  1. Read and understand the notice. Most of the time, the reason for the notice and further steps are mentioned in the communication sent.

  2. Verify the reason. Check whether the cause of the notice is legitimate.

  3. Respond to the notice. Finally, you’ll have to provide a response on the notice within a stipulated time. For this, login to the ITD’s e-filing portal.

  • Go to pending actions.

  • If the notice includes a demand payment (which means you have to make an additional tax payment), you’ll have to go to the ‘Response to outstanding demand tab’.

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  • Else, go to ‘e-Proceedings’

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  • If you agree with the notice, file a revised return or pay the demand dues. And if you don’t, you’ll have to provide a justification along with valid proofs.

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Hi All,

Last year I filed capital loss after due date. In this year by mistake I have updated that capital loss. I received Notice u/s 143(1)(a). I have accepted given adjustments by Income tax. But its been 2 month file is yet not processed.

In e-proceeding section there is no action pending from end? Is there any thing I can do to process my ITR?

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Hey @kawalkarhemant

In such a case, you can file a grievance for processing the ITR on the e-filing portal. To raise a grievance, you need to log into the portal and then navigate to Grievances > Submit grievance.

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receive an income tax notice, promptly review the document, gather necessary documentation, and consider consulting a tax professional for guidance. Respond by the specified deadline and provide any requested information to resolve the issue.