ITR Filing 2025: A Quick Guide to Handling Tax Notices and Avoiding Penalties

Filing your Income Tax Return (ITR) on time isn’t the end of the road. Sometimes, even after timely filing, the Income Tax Department may send a notice or intimation - and while it can be alarming, most of these are routine and manageable.

Here’s a clear, no-stress guide to understanding and handling income tax notices in 2025.

First Things First: Know What You’ve Received
Not all communications from the tax department mean trouble.

• “An intimation shares processing details and may not need a response, but a notice requires your attention.”
• Always verify the notice’s authenticity on the e-filing portal .
• Navigate to the ‘e-Proceedings’ section to view and respond.

What Triggers a Notice?

• Mismatched TDS entries
• Undisclosed income
• Errors in return filing
• High-value transactions
• Past tax dues

Siddharth Maurya advises: “To handle an income tax notice, log into the e-filing portal and head to the ‘e-Proceedings’ section. This is where you can view and respond electronically. Make sure to gather all key documents, including Form 16, bank statements, and investment proofs.”

General Rules to Follow

• Don’t ignore it – Every notice has a response timeline. Missing it can mean penalties.
• Use Form 26AS & AIS – Reconcile your income and TDS details to avoid mismatches.
• Act fast – Even minor issues can grow bigger if delayed.
• Stay accurate – Incomplete or incorrect info invites more scrutiny.
• Seek expert help – Complex cases call for a tax professional.

Common Notices and How to Respond

Section 143(1): Intimation after processing

• Sent for TDS mismatches, late filing, or errors.
• ✔ Action: Review and pay dues (if any) within 30 days or file a rectification.

Section 245: Adjustment of refund against old dues

• ✔ Action: Respond within 15 days. Silence = agreement.

Section 142(1): Information request before assessment

• Issued if you haven’t filed or if more data is needed.
• ✔ Action: File the pending return or submit documents on time.

Section 139(9): Defective return

• Points out missing or incorrect details in your return.
• ✔ Action: Correct and re-file within 15 days.

Section 133(6): Query on financial transactions

• Usually relates to high-value actions like property purchases.
• ✔ Action: Submit bank statements, agreements, or other proofs.

HRA & TDS mismatch

• Happens when claimed HRA doesn’t match records.
• ✔ Action: Keep rent receipts and landlord PAN. If needed, file an updated return.

Section 143(2): Scrutiny notice

• Means your return is being examined in detail.
• ✔ Action: Submit all income and deduction proofs. Non-response leads to estimated tax.

Section 148: Income escaping assessment

• Triggered if unreported income is found.
• ✔ Action: Provide explanations or file a revised return.

Section 271AAC(1): Penalty for unexplained income

• Applied to sudden, unexplained money inflows.
• ✔ Action: Share valid income source proofs — penalties can go up to 60%.

“Differentiate between an intimation and a notice.” Most notices are procedural, not punitive. Timely, accurate responses backed by proper documentation can save you from stress, fines, and legal complications. When in doubt, don't hesitate to consult a tax expert.

Stay alert. Stay informed. And make 2025 your smoothest tax year yet.