Received an income tax notice? What to do first

First, stay calm

Receiving a notice from the income tax department is common, and many notices are routine. They may ask for a clarification, point out a mismatch or inform you of an adjustment. A measured and prompt response is usually more helpful than a hurried one.

Step 1: confirm that the notice is genuine

Notices are issued through the e-filing portal and are normally also sent to the email address and mobile number registered there. Log in to your account directly, rather than through a link in a message, and check whether the notice appears under your pending actions or e-proceedings. Be cautious about messages that ask you to pay money to a personal account or to share your login details.

Step 2: read it carefully

Note the following details:

• The type of notice and the provision of the law cited
• The year it relates to, noting that the Income-tax Act, 2025 applies from tax year 2026-27 while earlier years continue under the 1961 Act
• The date of the notice and the last date for your response
• What exactly is being asked, such as a document, an explanation or a payment

Common types of notice

Intimation after processing of a return. This shows the tax computed by the department. It may agree with your return or show a difference or a demand.

Notice of a defect or a mismatch. This can arise where information in your return does not match tax statements, for example on TDS credit or reported receipts.

Scrutiny notice. This calls for details or documents on selected items in a return.

Notice about income that may have escaped assessment. This relates to earlier years and has specific procedural requirements.

Demand notice or penalty notice. This follows an order and states an amount payable and the time to pay or appeal.

Step 3: compare it with your records

Look at your Form 26AS, Annual Information Statement, bank statements, contracts and invoices for the year. Creators commonly see queries about brand payments, foreign receipts, gifts and benefits received, and TDS credits that do not appear in the statements. Working out where the difference arises usually helps you to give a short, factual reply.

Step 4: respond within the time given

Replies are generally filed online through the e-filing portal, and the portal acknowledges what you submit. If you need more time, a request for extension can sometimes be made, but it should not be assumed to be granted. Where you agree with an adjustment, you may be able to pay the amount. Where you disagree, give your reasons and supporting documents.

If you disagree with an order

If an order is passed with which you disagree, there are remedies such as rectification of an apparent mistake or an appeal. These have strict time limits stated in the order, so please note the dates as soon as you receive it.

What to avoid

• Ignoring the notice because the amount seems small
• Replying with documents you have not checked
• Sharing portal login details with third parties
• Making statements you cannot support with records

If you have received a notice and would like help understanding it, you can share it with us in confidence. Please note the response date when you do.