How to Respond to an Income Tax Notice Online?

Receiving an income tax notice from the Income Tax Department can be a nerve-wracking experience for any taxpayer. However, with the advent of the online income tax portal and the digitization of tax-related processes in India, responding to such notices has become easier and smoother transparent and user-friendly which helps the taxpayer a lot. Whether the notice is for a simple clarification, a mismatch in tax credit, or more serious scrutiny, the key is to remain calm, understand the notice carefully, and respond within the stipulated time.

In this article, we will walk you through the entire process of responding to an income tax notice online—from understanding the types of notices to detailed steps on how to reply on the e-filing portal.

Understanding an Income Tax Notice

The first step in responding appropriately is to understand why the notice has been issued. Some of the common reasons include:

• Mismatch in income or TDS details
• Non-filing or delayed filing of return
• Scrutiny assessment under Section 143(2)
• Defective return under Section 139(9)
• Demand for additional tax under Section 156
• Reassessment or income escaping assessment (Section 147)

Each notice comes with a unique Document Identification Number and will be served to the taxpayer’s registered email and/or via the e-filing portal.

Types of Income Tax Notices

Here are some commonly issued notices and what they mean:

1. Intimation under Section 143(1)

This is an intimation, not a notice. It informs the taxpayer of any adjustments made in the ITR and the final tax/refund outcome. If you agree, no action is needed. If you disagree, you can respond online.

2. Notice under Section 139(9) – Defective Return

This notice indicates that the return filed has certain defects. You must correct and resubmit the return within 15 days.

3. Notice under Section 142(1)

This is a notice to furnish and provide the required additional information or documents before assessing tax liabilities. It is usually issued when the return is under the tax department’s scrutiny or before initiating a full assessment process.

4. Notice under Section 143(2)

This is a scrutiny and assessment notice, which implies that your return has been picked up for detailed examination by a tax authority. You are required to respond and provide supporting documents and records…!

5. Notice under Section 148

This is issued for reassessment if the Assessing Officer believes that your income has escaped assessment.

Checklist Before Responding Online

Before logging in to the portal to respond, keep the following ready:

• PAN card and password to access the e-filing portal.
• Copy of the notice.
• Acknowledgment number and DIN (Document Identification Number).
• Supporting documents or explanations.
• Form 26AS (to match TDS details).
• Income computation sheet.
• Bank statements, if required.

Step-by-Step Guide: How to Respond to a Tax Notice Online?

Here’s how to respond to an income tax notice via the Income Tax e-Filing portal:

Step 1: Login to the Portal

• Visit https://www.incometax.gov.in
• Login using your PAN, password, and captcha code.
• You may be prompted for OTP if two-factor authentication is enabled.

Step 2: Navigate to ‘e-Proceedings’

• After login, go to “Pending Actions” > “e-Proceedings”.
• Select the appropriate assessment year for which the notice was received.

Step 3: View the Notice Details

• Click on the reference number or DIN to view the notice.
• Download and read the notice carefully. Understand what is being asked.

Step 4: Submit Your Response

• Under the relevant notice, click “Submit Response”.
• Choose from the available options, e.g., “Agree,” “Partially Agree,” or “Disagree.”
• Upload required supporting documents (PDF format, size as per portal guidelines).
• Write a clear and concise explanation if needed.

Tip: If unsure of how to respond, consult a tax professional before submitting your response.

Step 5: Submit and Acknowledge

• Once you’ve filled out all details and uploaded documents, click “Submit.”
• Download the acknowledgment receipt for your records.

Sample Scenarios and How to Respond

Case 1: Mismatch in Form 26AS and ITR

• Reason: Your employer deducted TDS, but you failed to report that income.
• Response: Agree with the notice, revise your return if needed, and provide Form 16 or salary slips as evidence.

Case 2: Defective Return u/s 139(9)

• Reason: For example, you submitted an ITR without mandatory disclosures.
• Response: Log in, correct the defect (such as attaching a balance sheet or audit report), and resubmit the return.

Case 3: Scrutiny Notice u/s 143(2)

• Reason: High-value transactions or mismatch in reported income and actual bank deposits.
• Response: Prepare a complete file of income, expenses, and bank statements. Reply via the e-proceedings section with supporting documentation.

Important Deadlines

Always pay close attention to the deadline mentioned in the notice.

• Typically, the response time is 15 to 30 days from the date of issue.
• For scrutiny or reassessment notices, specific dates and appearances (virtual or physical) may be required.

Non-compliance can result in penalties, interest, or even best judgment assessment under Section 144.

When to Revise the Return

If you agree with the mistake or omission pointed out in the notice, the easiest way may be to revise your return under Section 139(5), provided it is within the permissible time limit.

Steps to Revise Return Online

1. Login to the e-filing portal.
2. Go to “File Income Tax Return.”
3. Select the applicable assessment year.
4. Choose “Revised Return” and quote the original acknowledgment number.
5. File the corrected ITR and verify it.

This revised return can then be submitted as part of your response.

Seeking Professional Help

Some notices—particularly scrutiny (143(2)) or reassessment (148)—can be complex. In such cases, engaging a chartered accountant (CA) or tax consultant is advisable.

They can help with:

• Drafting precise responses.
• Attending virtual hearings on your behalf.
• Reducing the risk of adverse outcomes.

What Happens After You Respond?

Once your response is submitted, the Income Tax Department may:

• Accept your explanation and close the case.
• Ask for further clarification or documents.
• Initiate further action like assessment, re-assessment, or issue a demand/refund order.

You can track the progress under:

Dashboard > Pending Actions > e-Proceedings or Worklist.

Redressal Mechanisms

If you believe the notice or outcome is incorrect, you have the right to:

• File a rectification request under Section 154.
• Submit a grievance via the e-Nivaran system.
• File an appeal before the Commissioner of Income Tax (Appeals) online.

Conclusion

Receiving a notice from the Income Tax Department is not necessarily a cause for panic and stress. Most are routine and can be resolved by providing the correct information and taking timely action as per the authorities’ directions. The e-filing portal has made it significantly easier to respond to income tax notices online, reducing paperwork and simplifying the compliance process for taxpayers.

Being aware of your income tax filing records, regularly reconciling your Form 26AS, and responding on time are key to staying on the right side of the tax authorities. When in doubt, never hesitate to seek professional guidance.