Income Tax Notice Types 2025: How to Respond

Receiving an income tax notice can be stressful, but most notices are routine and not a cause for alarm. Under the new Income Tax Act 2025, the assessment and notice provisions have been renumbered. The old Sections 143, 147, and 148 are now Sections 270, 279, and 280.

Sections 143/147/148 → 270/279/280: What Changed

Types of Notices You May Receive

1. Intimation Under Section 270(1) - Old 143(1)

This is the most common notice and is not a cause for worry:

• Automated processing - the tax department's computer compares your return with TDS data, bank information, and other records
• Mismatch notice - if the department's calculation differs from yours (tax payable, refund amount, income declared)
• No human officer involved - this is a system-generated intimation
• Time limit - must be sent within 9 months from the end of the assessment year in which the return was filed
• Common reasons - TDS mismatch, arithmetic errors, incorrect deduction claims, income not reported

2. Scrutiny Notice Under Section 270(2) - Old 143(2)

This is a more detailed examination of your return:

• Selected for scrutiny - an Assessing Officer examines your return in detail
• You must respond - provide documents, evidence, and explanations for the items questioned
• Time limit to issue - must be served within 3 months from the end of the assessment year
• Time limit to complete - the assessment order must be passed within 9 months from the end of the assessment year
• Faceless assessment - most scrutiny assessments are now conducted online through the faceless assessment system, without meeting an officer in person

3. Reassessment Notice Under Section 280 - Old 148

This is issued when the department believes income has escaped assessment in a previous year:

• Income escaping assessment - the department has information suggesting you did not report certain income
• Time limit - generally within 3 years from the end of the relevant assessment year. Can be extended to 10 years if the escaped income is Rs 50 lakh or more
• Prior approval required - the Assessing Officer must get approval from a higher authority before issuing this notice
• Section 280A procedure - before issuing the notice, the department must share the information with you and give you a chance to respond (this safeguard was added to prevent arbitrary reassessments)

What Triggers a Notice

The most common triggers for income tax notices:

• TDS mismatch - income reported in your return does not match TDS certificates or Form 26AS / AIS
• High-value transactions - buying property, making large investments, or receiving large amounts that do not match your declared income
• Not filing a return - if the department has evidence that you had taxable income but did not file
• Cash deposits - large cash deposits in bank accounts, especially if they do not match your income profile
• Foreign assets or income - information from foreign governments about your overseas accounts or income
• Random or risk-based selection - some returns are picked for scrutiny based on risk profiling algorithms
• Claiming high deductions or refunds - returns with unusually high refund claims or deductions may be flagged

How to Respond to a Notice

• Do not ignore it - non-response can lead to a best judgment assessment under Section 271 (old 144), where the officer estimates your income without your input
• Check the notice carefully - read what is being asked. Most Section 270(1) notices require only a simple correction or acknowledgment
• Respond through the e-filing portal - most notices have an online response option on the Income Tax e-filing website
• Keep all documents ready - bank statements, investment proofs, Form 16, rent receipts, and any other supporting documents
• Respond within the deadline - every notice specifies a response date. Missing it can lead to penalties or adverse orders
• Get professional help if needed - for scrutiny or reassessment notices, working with a Chartered Accountant is strongly recommended

Time Limits Under the New Act

• Section 270(1) intimation - within 9 months from end of assessment year
• Section 270(2) scrutiny notice - within 3 months from end of assessment year
• Scrutiny assessment order - within 9 months from end of assessment year
• Reassessment (income up to Rs 50 lakh) - within 3 years from end of assessment year
• Reassessment (income above Rs 50 lakh) - within 10 years from end of assessment year

Frequently Asked Questions

Disclaimer: This article provides general information about the Income Tax Act 2025 and is not tax advice. Consult a qualified Chartered Accountant for advice specific to your situation.