What Is Income Tax Notice? How To Verify and Respond

By CA Mohammed S Chokhawala

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Updated on: Aug 28th, 2025

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4 min read

An Income Tax Notice is an official communication from the Income Tax Department alerting a taxpayer to discrepancies, missing information, overdue filing, or unreported income. Notice can be issued to the taxpayer irrespective of whether returns are filed or not. 

Key Highlights

  • Verify the authenticity of notices on the Income Tax Portal before responding, as many fake notices are being circulated.
  • Income Tax Notice should be replied to within 30 days, ignoring can result in penalty of Rs. 10,000. 
  • Understand the reason for the notice and submit your response through the Income Tax Portal. 

What is Income Tax Notice?

An income tax notice is an official communication issued by the Income Tax Department to a taxpayer regarding discrepancies, non-compliance, or additional information required related to their Income Tax Return (ITR). Each notice is issued under a specific section of the Income Tax Act and requires timely action to avoid penalties or legal consequences. It may be sent for reasons such as:

  • Non-filing of returns 
  • Mismatch in reported income 
  • Verification of claims
  • Demand for outstanding tax. 

Types of Notices/Intimations

The following are some of the popular notices issued under the Income Tax Act:

SectionNotice TypeCommon Reason for Notice
142(1)Inquiry NoticeFiled return but AO requires additional information/documents.
Not filed return and AO requires you to file it.
Enables officer to make a fair assessment.a
133(6)Information NoticeITR not filed despite income above exemption limit (as per AIS).
Salary/Interest/Capital gains in AIS not correctly reported in ITR.
Highvalue expenses (property, foreign travel, mutual funds/stocks) disproportionate to income declared.
143(1)Intimation (not a notice)Issued after CPC processes ITR.
Adjustments made for errors, wrong claims, etc.
Results in: 
(a) Tax payable,
(b) Refund due, 
(c) No demand/refund but adjustment of losses.
143(2)Scrutiny NoticeReturn picked for detailed scrutiny.
AO not satisfied with 143(1) response or no response.
Issued to check understatement of income, excessive loss claims, or lower tax paid.
148Income Escaping AssessmentAO believes income has been underreported or not reported.
Ensures undisclosed income is brought under assessment.
245Refund Adjustment NoticeRefund due but pending demand exists.
AO can adjust refund against demand after providing notice and opportunity to respond.
Must respond within 30 days, else treated as consent.

What to do when you Receive an Income Tax Notice?

Follow the below steps to understand how to respond to Income Tax Notices:

Step 1: Read the notice carefully and understand the reason for which the notice has been issued. 

Step 2: You can also verify the authenticity of the notice through the Income Tax Portal. 

Step 3: Once you understand the reason, collect all the necessary information and documents such as Form 16, bank statements, investment proofs, transaction details, or any other related records.

Step 4: Log in to your Income Tax Portal and navigate to Pending Action > e-Proceedings to view the notice.

Step 5: Prepare your response. Write a clear explanation and attach all the required proofs to support your claims. 

Step 6: Submit your reply online through the portal and save or download the acknowledgement ID or receipt for further reference. 

Step 7: Make sure to track the portal and email for further communications from the Income Tax Department. 

How to Verify or Authenticate Income Tax Notices?

Before responding to any notice or order from the Income Tax Department, it is crucial to verify its authenticity. You can check whether the income tax notice is genuine by using the ‘Authenticate Notice/Order’ feature on the Income Tax e-filing portal. This tool allows you to confirm if the communication was officially issued by the department, helping you avoid fraud or phishing attempts.

Step 1: Visit the income tax e-filing portal. On the home page, under ‘Quick Links’ click on ‘Authenticate notice/order issued by ITD.

Step 2: You can authenticate using either:

  • PAN, document type, assessment year, issue date, and mobile number (for notice/order/letter issued for AY 2011-12 and subsequent years only) or
  • Document Identification Number and mobile number (for all assessment years)

Step 3: If you want to authenticate by PAN, document type, assessment year, issue date, and mobile number, select the option and enter all the details.

Step 4: After filling in all the details, you will receive an OTP. Enter the OTP received.
Once the OTP is validated, the Document Identification Number (DIN) of the notice issued, along with the date of issue of the notice, will be displayed.

If the notice is not issued by the ITD, it will display a message – No record found for the given criteria.

Step 5: Another alternative is to authenticate using the Document Identification Number (DIN) and mobile number.

Step 6: Enter DIN and mobile number and continue. You will receive an OTP. Validate using OTP.

If the notice/order is issued by the income tax authority, it will display a success message.

Otherwise, it will show No record found for the given Document Number.

What are the Most Common Reasons for Receiving Notice? 

The most common causes for which you might receive an income tax notice include the following:

  1. Inconsistency in the amount of TDS reported
  2. An inaccuracy on your tax return
  3. Failure to submit all required papers
  4. Failure to file your tax returns
  5. When you make investments in your spouse's name but fail to report them on your income tax returns.
  6. If high-value transactions occurred during the fiscal year but were not correctly disclosed on the income tax return
  7. If the assessing officer randomly examines your income tax return
  8. When long-term capital gains from stock investments are not properly disclosed
  9. If the taxpayer fails to declare any income
  10. If the incorrect income tax return form is used to file the income tax return

Related Articles: 
Reasons for Receiving Income Tax Notice
Income Tax Notice to Salaried Employees

Frequently Asked Questions

Why must I authenticate the notice/order by Income Tax Authorities?

From 1st October 2019 onwards, every communication sent by the Income Tax department will be assigned a unique Document Identification Number (DIN). To ensure the authenticity of any notice, order, or communication you receive from the Income Tax Authority, you can verify its genuineness by using this service.

What If the ITD notice/order does not bear a DIN?

If you receive a notice, order, or letter that does not bear a valid Document Identification Number (DIN), it should be considered invalid and legally nonexistent. In such a situation, you are not required to act or respond to that communication. It is as if the communication was never issued in the first place.

Where can I authenticate the order issued to me by ITD?

To verify the authenticity of an order issued by the Income Tax authorities, you can utilize the "Authenticate Notice / Order Issued by ITD" service available on the e-Filing portal. This service allows you to authenticate and confirm the validity of the notice or order received from the Income Tax Department.

Do I need to log in to authenticate the notice issued to me by ITD?

You can easily authenticate a notice or order issued by the Income Tax Department without the need to log in to the e-Filing portal. Simply click on the "Authenticate Notice/Order Issued by ITD" link on the e-Filing portal, and follow the instructions to verify the authenticity of the notice or order.

Do I need to enter the same mobile number as registered on the e-Filing portal to authenticate my notice?

It is not mandatory to enter the mobile number registered on the e-filing portal to authenticate a notice, letter, or any communication issued by the Income Tax Department. Instead, you can receive the One-Time Password (OTP) on any accessible mobile number by entering it in the designated mobile number textbox during the authentication process.

What is DIN?

DIN stands for Document Identification Number. It is a unique 20-digit number generated by a computer system. It is mandatory for every communication, including letters, notices, orders, and other correspondence, issued by any Income Tax Authority to include the quoted DIN. This helps ensure proper identification and tracking of the communication between the Income Tax Authority and the taxpayer.

What would happen if you do not respond to Income tax notice?

Consequences on not responding to Tax notice is that your return will be considered invalid, if not responded within stipulated time.  Hefty penalty, interest may be charged.

Within how many years should the income tax department send notice?

From the date of filing ITR, in the next 3 years from the end of the assessment year and 10 years from the end of assessment year if income escaping amount is more than Rs 50 lakh

How to respond to a notice?

Income tax portal helps your respond to the tax notice you have received, here is how to do it. 

  1. Log into E-filing portal using your password and userID
  2. Click on pending actions 
  3. select ‘respond to outstanding demand’
What happens if an income tax notice comes?

Receiving notices do not conclude a default on your part. As long as due responses are filed and sufficient documents and explanations are provided to defense your correctness, you are not required to pay any further dues. 

How do I resolve my income tax notice?

To resolve an income tax notice, start by logging in to the Income Tax e-filing portal and accessing the notice under the "e-Proceedings" or "Compliance" section. Draft a suitable response justifying your income and claims and upload supporting documents, if required. Submit your reply within the deadline mentioned. If needed, consult a tax expert to ensure accurate and timely compliance.

Can I ignore an income tax notice?

No, you should never ignore an income tax notice. Ignoring a notice from the Income Tax Department can lead to serious consequences such as penalties, prosecution or legal action in cases of willful evasion. The department has the right to calculate your income according to information available with them and levy more taxes on you through best judgement assessment.

How to check notice of income tax online?

You can check income tax notice online through the Income Tax e-filing portal under Notice/Orders. 

How to challenge an income tax notice?

To challenge an income tax notice, review it carefully to understand the reason and compare it with your filed ITR and financial records. If incorrect, respond through the e-filing portal with valid explanations and supporting documents. You can also file a rectification request under Section 154 if needed. If dissatisfied with the outcome, file an appeal with the Commissioner of Income Tax (Appeals) within 30 days.

What is the penalty for an income tax notice?

The penalty for an income tax notice depends on the type of notice and the nature of non-compliance. For instance, failing to respond to a notice under Section 142(1) or 143(2) may result in a penalty of up to ₹10,000 and even prosecution in some cases. If the notice is for underreporting or misreporting income, penalties can range from 50% to 200% of the tax amount.

What is the mismatch issue related to NSC interest in ITR 2025?

The mismatch arises because the Post Office reports the total lump‑sum interest on NSCs in the year of maturity through AIS, while many taxpayers declare that interest on a yearly basis in their ITR. This difference often triggers discrepancy notices.

Can I explain NSC interest mismatch to the IT department?

Yes. In your response, clarify that although the Post Office shows the full interest in one year, you've consistently declared it annually according to your accounting method.

If my income is below taxable threshold, do I still need to worry about mismatches?

Even if you're below the taxable limit, mismatches may still trigger notices. It's advisable to respond and explain your consistent method of declaring interest, as per AIS mismatch guidelines.

What are the common other reasons for a tax notice due to mismatch?

Tax notices can also arise from arithmetic errors, unreported high-value transactions, non-disclosures, or inconsistent information across years. The Department is now comparing current ITRs with previous filings as well.

About the Author
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CA Mohammed S Chokhawala

Content Writer
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I'm a chartered accountant, well-versed in the ins and outs of income tax, GST, and keeping the books balanced. Numbers are my thing, I can sift through financial statements and tax codes with the best of them. But there's another side to me – a side that thrives on words, not figures. Read more

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