How to File a Response to Income Tax Notice on e-Filing Portal

Receiving an income tax notice can feel like a punch in the gut — stressful, urgent, and full of unfamiliar terms. You are not alone: salaried employees, professionals, founders and MSMEs across India face these notices frequently and often don’t know the safest next step.

Summary: The key is to act quickly, understand the notice (section and timelines), reconcile records like AIS/26AS and ITR, pay any self-assessment tax (with challan 280) if required, and file a clear response on the e-Filing portal with supporting documents to avoid penalties or escalation.

What’s the real problem in India?

Tax administration in income tax india is increasingly digital — notices arrive on the e-Filing portal and expectations on timely, documented responses are high. But many taxpayers struggle with AY/PY terminology, the exact CBDT timelines, and the correct portal forms. Mix in TDS/TCS mismatches, overlooked capital gains indexation entries, or missed deductions like Section 80C limit claims — and you have a recipe for notices.

• You get a notice but don’t recognize whether it’s an intimation (u/s 143(1)) or a demand/deficiency notice (u/s 139(9), 143(2), 142(1)).
• TDS/TCS shown in AIS/26AS doesn’t match your records, causing disputed demand figures.
• Missed ITR filing last date or late payment interest results in unexpected interest and penalties.

What people get wrong

Common pitfalls turn a manageable notice into a headache:

• Ignoring the notice or missing the response deadline — which can lead to best judgment assessment or penalties under sections like 234A/234B/234C.
• Responding without reconciling AIS/26AS and bank statements — you may dispute tax credits wrongly or overlook credit entries.
• Not paying self-assessment tax or interest before filing a response — penalties can compound even if dispute is valid.
• Uploading incomplete supporting documents or using unclear language — increases the chance of follow-up notices.

A better approach

Use a structured, calm process rather than rushing a reply. Here’s a practical 4-step framework you can follow.

1. Identify the notice: note the section, AY/PY, and the deadline. Intimation under 143(1) typically flags computational mismatches, while notices under 139(9) request ITR rectification.
2. Reconcile records: download AIS/26AS and Form 26QB/26QC (if applicable), match TDS/TCS, capital gains (apply indexation where required), and check your bank/CAS entries.
3. Resolve and document: pay any required self-assessment tax (Challan 280) and interest; prepare a concise response with supporting PDFs—salary slips, bank statements, contract invoices, capital gains computation, proof of Section 80C investments up to the Section 80C limit, etc.
4. Submit on e-Filing portal: login, go to ‘My Account’ -> ‘View Notices’ or the ‘e-Proceedings’ section, click the notice and use the ‘Submit Response/Remedial’ option. Attach documents, include a clear cover note and keep the acknowledgement.

Real-world example: A Delhi-based freelancer received a 139(9) notice claiming a mismatch in TDS. After downloading AIS/26AS and their contract payments, they found a TDS credit missing from a client’s correction. By paying a small self-assessment interest and uploading the reconciliation on the portal, the demand was withdrawn within 30 days.

Quick implementation checklist

1. Immediately download and save the notice from the e-Filing portal and note the deadline.
2. Download AIS/26AS and compare TDS/TCS entries with your invoices/payments.
3. Recompute the tax for the AY in question using new vs old regime slabs if needed, and check capital gains indexation where applicable.
4. Identify documents to prove your claim (Form 16, invoices, bank statements, broker contract notes).
5. If tax is payable, generate Challan 280 and make payment; note BSR code and challan number.
6. Draft a concise response explaining reconciliation steps and attach evidence PDFs (naming each file clearly).
7. Log in to incometax.gov.in e-Filing portal → View Notices → Open the notice → Click ‘Submit Response’ → Upload files and enter the challan if you paid tax.
8. Keep the acknowledgment and monitor the e-Filing inbox for further communication.
9. If unsure, consult an expert — unresolved replies may lead to penalties or assessment orders.

What success looks like

• Notice closed or demand reduced within 30–60 days.
• Refunds processed faster due to corrected ITR and reconciled AIS/26AS.
• Fewer follow-up notices in the next 1–2 years (better record-keeping).
• Reduced interest and penalty outgo by timely payment of self-assessment tax.
• Clear audit trail (documents + portal acknowledgements) for any future scrutiny.

Risks & how to manage them

Risk: Missing the deadline can lead to assessment under best judgment. Mitigation: If you cannot prepare a full response, at least submit a short reply requesting an extension or asking for clarifications via the portal to show active engagement.

Risk: Incorrect payment or wrong challan details. Mitigation: Double-check BSR code, challan serial and AY while paying. Keep receipts and bank debit proofs.

Risk: Uploading sensitive info insecurely. Mitigation: Use PDFs, redact unnecessary personal data, and only share with authorised tax professionals when needed.

Tools & data

Use these India-specific resources:

• AIS/26AS — your consolidated TDS/TCS and demand details.
• e-Filing portal (incometax.gov.in) — to download notices, submit responses and view acknowledgements.
• TDS/TCS tracking tools and your accounting software for reconciling receipts.
• Challan 280 generator for self-assessment tax payments and interest calculators for sections 234A/234B/234C.

Also refer to our detailed ITR preparation steps for deadlines like ITR filing last date and for strategies around new vs old regime slabs and Section 80C limit planning: [link:ITR guide] and [link:tax-saving tips].

FAQs

Q: Can I respond to a notice after the deadline?
A: You can respond but the tax office may proceed with best judgment assessment or levy penalties. Always try to upload at least a preliminary response or request for clarification on the portal to show intent.

Q: Do I need to pay tax before responding?
A: If the notice asks for additional tax, paying self-assessment tax (Challan 280) with interest helps avoid further interest/penalty. Include the challan details in your e-Filing response.

Q: My AIS/26AS shows less TDS than I have. What next?
A: Reconcile with client Form 16A or TDS certificates. Contact the deductor to file a correction statement (TDS correction). Meanwhile, explain the discrepancy in your response and provide supporting invoices.

Q: Will responding myself be enough or should I hire a tax professional?
A: For simple computational mismatches you may respond yourself. For complex issues — large demands, transfer pricing, multi-year capital gains (indexation), or legal notices — consult a professional to avoid costly mistakes.

Next steps

If you’re unsure about the notice type, tax computations, or the portal process, don’t delay. A short review can prevent interest and penalties and often gets the demand withdrawn quickly.

Work with Finstory. Speak with an Expert for a personalised plan to reduce your tax outgo and stay compliant. Book a free 20-min consultation.

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