Last reviewed: 13 November 2026. An income-tax notice is rarely a verdict. Most are the department's systems asking a question because something in the return does not match the information they already hold. Answered properly and on time, most close without any addition. Ignored or answered casually, a small mismatch can become an addition, interest, penalty and a recovery action. This guide lists the notices individuals and companies receive most often, why each is issued, how long you have, and how to reply, with a detailed page for each.
Which law governs the notice you received?
The Income-tax Act, 2025 came into force on 1 April 2026, but section 536 of that Act keeps the 1961 Act alive for every proceeding relating to assessment years up to 2026-27, including notices, assessments, reassessments, rectifications, penalties and appeals initiated after that date. So a notice received in November 2026 about your FY 2024-25 or FY 2025-26 return will cite sections of the 1961 Act, and your reply should do the same. The new section numbers apply to tax year 2026-27 onwards, for which returns are due only from July 2027. Our guide to the Income-tax Act, 2025 explains the transition.
The common notices at a glance
| Notice | Why it usually comes | Who gets it most | Typical time to reply |
|---|---|---|---|
| Section 143(1)(a): proposed adjustment | Return does not match AIS, Form 26AS, Form 16 or the tax audit report | Salaried individuals, professionals, small businesses | 30 days |
| Section 139(9): defective return | Wrong ITR form, income shown without matching tax, missing audit report or balance sheet | Business and professional filers | 15 days |
| Sections 143(2) and 142(1): scrutiny | Return selected for detailed examination, by risk parameters or compulsory criteria | Businesses, companies, high-value individual returns | As stated in the notice, often 7 to 15 days |
| Sections 148A and 148: reassessment | Department holds information that income escaped assessment in an earlier year | Individuals and companies with large transactions | As stated in the 148A notice; return within the period in the 148 notice |
| High-value transactions, cash deposits, non-filing | SFT data shows deposits, property, investments or spending not matching the return, or no return filed | Individuals, especially non-filers and NRIs | As stated on the compliance portal |
| Section 156 demand and section 245 adjustment | Tax payable after processing or assessment; refund proposed to be adjusted against old demand | All taxpayers | 30 days to pay or respond |
| Section 270A penalty | Under-reporting or misreporting of income found in assessment | Taxpayers with additions in assessment | As stated in the notice |
| Notices typical for companies | Share capital and loans, TDS disallowances, related-party payments, MSME dues, losses | Private limited companies, LLPs, startups | As stated in each notice |
Why individuals usually get notices
- Interest, dividend, capital gains or rent shown in AIS but left out of the return. See how to reconcile Form 16, 26AS and AIS.
- Deductions or HRA claimed in the return that the employer did not allow in Form 16.
- Cash deposits, property purchases, credit card spending or share and mutual fund investments that look large against declared income.
- Wrong ITR form, or capital gains, foreign assets or business income in a form that cannot carry them.
- TDS credit claimed that does not appear in Form 26AS, or tax regime switches made incorrectly.
- No return filed although income or transactions crossed the reporting thresholds.
Most of these are avoidable at the filing stage. Our list of common ITR filing mistakes covers the prevention side.
Why companies and businesses usually get notices
- Share capital, premium or unsecured loans whose source is not established (section 68).
- Expenses disallowed for TDS not deducted or not paid (section 40(a)(ia)), and TDS defaults on the deductor side.
- Cash payments above limits, and loans or repayments in cash (sections 40A(3), 269SS, 269T).
- Payments to micro and small enterprises beyond the agreed or 45-day period (section 43B(h)).
- Tax audit report figures that differ from the return; losses carried forward after a change in shareholding (section 79).
- Related-party transactions, international or specified domestic transactions referred for transfer pricing.
How to respond to any notice: the working sequence
- Authenticate it. Every notice should carry a Document Identification Number (DIN) and appear on the e-filing portal. A notice without a DIN is not a valid communication under CBDT Circular 19/2019, subject to the limited exceptions in that circular.
- Read what it actually asks. Section, assessment year, the specific issue and the deadline. Many replies fail because they answer a different question.
- Reconcile before writing. Return, AIS, Form 26AS, books, bank statements and the tax audit report, side by side.
- Reply on the portal with evidence. A short, numbered reply with a document for every statement. Keep the acknowledgement.
- Ask for time early if needed. An adjournment request before the due date is usually allowed; silence is treated as non-compliance and can lead to a best-judgment assessment.
- Ask for a personal hearing through video conference in faceless proceedings, where facts need explanation.
- Diarise the order and the appeal clock. An adverse order has a 30-day window for appeal to the CIT(A).
- Missed a deadline already? It is rarely the end of the road. See what to do after missing an income-tax notice deadline, including condonation of delay.
What changed in 2026
| Change | Position |
|---|---|
| Income-tax Act, 2025 in force from 1 April 2026 | New section numbers apply from tax year 2026-27; proceedings for assessment years up to 2026-27 continue under the 1961 Act |
| Scrutiny notices for returns filed in FY 2025-26 | Section 143(2) notice had to be served by 30 June 2026 (CBDT guidelines dated 4 June 2026). Returns filed in FY 2026-27 can receive one up to 30 June 2027 |
| Assessment and penalty in one order | Finance Act, 2026 integrates under-reporting penalty into the assessment order for proceedings under the 2025 Act |
| Stay of demand during first appeal | Budget 2026 announced a reduction of the standard deposit from 20% to 10% of the core tax demand; check the current CBDT instruction before applying |
| Interest on penalty during first appeal | Budget 2026 removed interest on penalty while the first appeal is pending, under the new framework |
How we handle a notice
We start with the notice and the return, reconcile the figures the department is relying on, and agree with you whether to accept, explain or contest each point. The reply is drafted to the issue, filed on the portal, and tracked to the order. Where an order goes against you, we prepare the appeal and the stay application. Our appeals guide explains that stage.
Frequently asked questions
Why did I get an income-tax notice?
Most notices are triggered by a mismatch between your return and the information the department already holds in AIS, Form 26AS, Form 16 or the tax audit report, or by high-value transactions such as cash deposits, property purchases and investments that look large against declared income. Others follow selection for scrutiny or information that income escaped assessment.
How do I check whether an income-tax notice is genuine?
Log in to the e-filing portal and check Pending Actions or e-Proceedings, and check that the notice carries a Document Identification Number. Under CBDT Circular 19/2019, a communication without a DIN is treated as invalid unless it falls within the narrow exceptions.
What happens if I do not reply to an income-tax notice?
The officer can proceed on the information available, which usually means additions to income, tax with interest, and possible penalty. In scrutiny, non-compliance can lead to a best-judgment assessment under section 144. Replying late is better than not replying, and asking for an adjournment before the due date is better still.
Which Act applies to a notice received in 2026?
For assessment years up to 2026-27, the Income-tax Act, 1961 continues to apply to notices, assessments, penalties and appeals under section 536 of the Income-tax Act, 2025, even if the notice is issued after 1 April 2026. The 2025 Act applies to tax year 2026-27 onwards.
Can I reply to an income-tax notice myself?
Simple notices such as a 143(1)(a) mismatch can often be handled by the taxpayer through the portal. Scrutiny, reassessment, penalty and company notices usually involve legal positions and documentation where a professional review reduces the risk of an addition that later needs an appeal.
How long does the department have to issue a reassessment notice?
For notices issued from 1 September 2024, a section 148 notice cannot be issued after three years and three months from the end of the assessment year, or five years and three months where the income escaping assessment is ₹50 lakh or more.
Is a notice the same as a demand?
No. A notice asks for information or an explanation. A demand under section 156 is issued after processing or assessment and asks for payment of tax. A demand can be challenged by rectification or appeal, and stay of recovery can be sought while the appeal is pending.
We read the notice against your return, AIS and books, tell you what it is really asking, prepare the reply with supporting documents, file it on the portal and follow the matter through to the order and, where needed, appeal. The outcome rests with the tax authority; our work is to put a complete, documented response before it.
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This article is for general information and does not constitute advice on any specific case. Sources: the Income-tax Act, 1961 (which continues to govern assessment years up to 2026-27 under section 536 of the Income-tax Act, 2025), the Income-tax Act, 2025, the Finance Act, 2026 and the CBDT instructions and circulars cited in the text. Time limits run from the date of service of each notice or order; confirm the current position and the exact dates in your notice before acting. Firm details: Somesh Chandak & Associates, Chartered Accountants, Unit 119, 1st Floor, Centura Square IT Park, SG Barve Road, Wagle Estate, Thane West 400604. FRN 158694W.