ITR filed successfully? Here are 8 income tax notices the department may send and what to do about them
An Income Tax Return (ITR) serves as a key document for verifying a borrower’s income. Banks, NBFCs and fintech lenders often place significant weight on ITRs, particularly when the loan amount exceeds a certain limit.
A consistent record of filing helps lenders assess a borrower’s actual income, stability of earnings and financial discipline. With the 31 July deadline for filing income tax returns (ITRs) now over for salaried taxpayers, pensioners, students and others who do not have business income, they should keep an eye on their email and regularly check the Income Tax e-filing portal and compliance portal.
These channels can alert taxpayers to any communication from the Income Tax Department regarding discrepancies in their returns. While minor errors may be resolved during processing by the Centralised Processing Centre (CPC) in Bengaluru, more serious issues, such as unexplained income, can lead to scrutiny or more detailed tax proceedings.
However, receiving a tax notice does not necessarily mean that a taxpayer is in trouble. Some communications are simply issued after an ITR has been processed, while others are routine, system-generated notices seeking clarification or asking taxpayers to rectify a mismatch. In several cases, the department may simply be giving the taxpayer an opportunity to clarify an issue or correct information before taking any further action.
8 types of tax notices salaried taxpayers can receive after filing ITR
1. Section 143(1)(a)
The tax department may issue this notice if it spots a potential discrepancy or apparent error while processing your ITR. The issue could relate to deductions, tax credits or information received from employers, banks and other reporting entities, according to The Economic Times. Check the proposed adjustment against your tax records. If the department’s calculation is correct, accept it. If you disagree, submit an online response with relevant supporting documents before the specified deadline.
2. Section 139(9)
A notice under this section may be sent if the Income Tax Department finds that your filed return has errors, omissions or lacks required details. You should address the deficiencies highlighted in the notice and file the corrected return within the given deadline. If the issues are not fixed on time, the ITR may be declared invalid.
3. Section 142(1)
The Assessing Officer can issue this notice when further details, documents or explanations are needed to assess a taxpayer’s income. It may also be sent to someone who was required to file an ITR but has not done so. Taxpayers should provide the requested information or documents through the e-proceedings portal within the specified timeframe, ensuring that the submission is complete and backed by relevant records.
4. Section 143(2)
This notice is sent when the Income Tax Department selects an ITR for detailed scrutiny to examine whether the reported income, deductions, exemptions and other claims are accurate. The taxpayer should address all questions raised by the department and submit the required supporting documents. Responses must be filed within the prescribed deadlines to ensure timely compliance with the assessment proceedings.
5. Section 148
The Assessing Officer may issue this notice when income is believed to have escaped assessment, subject to the conditions and safeguards prescribed under the Income-tax Act. Examine the reasons and basis for the notice, file the ITR as required and provide a detailed response. Given the nature of such proceedings, seeking professional tax advice may be advisable.
6. Section 245
The notice may be sent when the Income Tax Department intends to set off your refund against an unpaid tax liability from a different assessment year, The Economic Times report noted. Taxpayers should first check whether the outstanding demand is legitimate and, if confirmed, consent to the proposed adjustment. If the demand has already been paid or is disputed, submit an online objection along with relevant supporting documents.
7. Section 154
This provision is used to correct a mistake apparent from the existing record, such as a clerical, mathematical or other obvious error in a tax order. Review the proposed rectification carefully. If the error is genuine, accept the correction. If you disagree, submit your objections along with the reasons and supporting evidence.
8. Section 263
The Commissioner may invoke this provision when an assessment order is considered erroneous and prejudicial to the interests of the Revenue and proposes to revise it. Submit a detailed written explanation setting out why the assessment order should not be changed, supported by relevant facts, documents and applicable legal grounds. Seeking assistance from a tax professional is generally advisable in such cases.
