Millions of returns are processed by the Income Tax Department using automated systems. So, whenever they need some clarification on your ITR details or a mismatch is detected by these systems or by a tax officer, you may receive a notice.
What’s a notice?
An Income Tax Notice is a formal communication from the Department, asking you to review or respond to a specific issue related to your return.
If you’ve received a notice, here are some common reasons why:
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If there’s a mismatch between the income you reported and the Annual Information Statement (AIS), your return can get flagged. Here’s a guide on how to rectify the AIS mismatch in ITR.
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If you’ve made high-value transactions like depositing over ₹10 lakh cash, spending heavily on credit cards, or buying property worth ₹30 lakh but your reported income doesn’t reflect that level of spending. Here’s a guide on how to reply to the notice.
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If you’ve invested in the name of your spouse or minor children to save tax but didn’t report that income in your return under clubbing of income.
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If there’s a mistake in your return (defective return), like choosing the wrong form, missing some details, or not paying tax before filing.
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Sometimes, returns are picked randomly for checks, especially if certain claims like deductions that look unusually high for your income bracket.
How to find a tax notice?
When the Income Tax Department issues a notice, you’ll usually be informed on your registered email ID or SMS. If it comes by email, it may be a password-protected PDF. The password is always your PAN (in lowercase) + your date of birth (DDMMYYYY).
You can also log in to the Income Tax portal and navigate to Pending Actions, you’ll see these options:
- e-Proceedings – Use this for notices that require you to submit documents or offer a clarification.
- Response to Outstanding Demand – Use this for notices that involve an actual tax payment.
Once you view the notice, you can either:
- Agree and pay any dues,
- Disagree fully or partially by giving reasons and remarks, or
- File a revised ITR if you realise there was a mistake in your original return.
So, if you’ve received a notice, respond it within the timeline mentioned in the notice, and if you need help understanding what type of notice you’ve received, we’ve covered the types of notices and what it means in the thread here.