ITR Filing 2025: How To Handle Income Tax Notices, Avoid Penalties
Even if you've filed your tax returns on time, receiving a notice or intimation from the Income Tax Department can feel unsettling
ITR Filing 2025: Even if you've filed your tax returns on time, receiving a notice or intimation from the Income Tax Department can feel unsettling. It's crucial to address these notices quickly and accurately. Start by carefully reading the notice to understand its purpose — common triggers include income discrepancies, TDS mismatches, or missing information.
Siddharth Maurya, Founder & Managing Director of Vibhavangal Anukulakara Private Limited, advises: 'To handle an income tax notice, log into the e-filing portal and head to the 'e-Proceedings' section. This is where you can view and respond electronically. Make sure to gather all key documents, including Form 16, bank statements, and investment proofs."
Manikandan S, Tax Expert at Cleartax, emphasizes: 'Differentiate between an intimation and a notice. An intimation shares processing details and may not need a response, but a notice requires your attention. Verify the notice's authenticity on the e-filing portal before acting, especially with the Centralized Communication Scheme (CCS) now ensuring all notices are sent electronically."
Most notices are routine and manageable — the key is understanding them and responding correctly to avoid penalties and unnecessary stress. Here are some practical tips:
Don't Ignore: Every notice has a deadline — missing it can lead to penalties.
Be Accurate: Mismatches can trigger further scrutiny.
Usually sent to highlight TDS mismatches, calculation errors, or late filing.
Section 245
Adjustment against past dues
If a refund is due but you have past tax arrears, the department may adjust the refund.
Action:
Check under 'e-Proceedings' in your portal.
Agree/disagree with the reasons within 15 days.
No response means automatic adjustment.
Section 142(1)
Sent if you haven't filed your return or if additional details are needed.
Action:
File your pending return, if any.
Submit requested documents by the deadline to avoid penalties.
Section 139(9)
Defective return
Sent for errors or missing details in your return.
Correct and re-file within 15 days via 'e-Proceedings'.
Ignoring this may invalidate your return.
Seeks clarification on high-value transactions like large cash deposits or property purchases.
HRA and TDS Mismatch Notices
Sent when your HRA claim or TDS details don't align with department data.
Action:
Verify tenant TDS compliance if rent exceeds ₹50,000/month.
Keep rent receipts and landlord PAN details handy.
If there's a genuine mismatch, file an updated return and keep proof.
Section 143(2)
Scrutiny notice
Indicates your return is selected for detailed examination.
Action:
Submit all relevant proofs (income, deductions, expenses).
Attend hearings or respond through the portal.
Non-response can lead to estimated tax assessments.
Section 148
Issued if undisclosed income is suspected in earlier returns.
Action:
File a revised return or provide explanations as required.
Share proof of income sources.
Ignoring this can reopen past assessments and attract penalties.
Section 271AAC(1)
Penalty for unexplained income
Issued if unexplained income, like sudden deposits, is found during scrutiny.
Action:
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Provide clear documentation of the income's source.
Note that penalties can be as high as 60% for unexplained income.
Most of these notices can be handled smoothly with prompt action and accurate information. If you're unsure, always consult a tax expert to avoid bigger issues later.
About the Author
Aparna Deb
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a...Read More
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First Published:
June 02, 2025, 14:50 IST
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