Income Tax Notice: 7 Common Income Tax Notices for Employed People and Current Rules

Introduction

As a salaried employee in India, you might think your taxes are safely handled through TDS deductions by your employer—but income tax notices for employed people are more common than ever in 2025. With advanced data matching from Form 16, Form 26AS, Annual Information Statement (AIS), and high-value transactions, the Income Tax Department frequently flags discrepancies, leading to various types of income tax notices for salaried individuals. These notices aren’t always a sign of wrongdoing; many are routine checks or requests for clarification under the Income Tax Act. Understanding the 7 most common income tax notices that come to employed people, along with the latest rules on how to respond, can help you avoid penalties and resolve issues quickly. Stay compliant and informed to navigate these effectively.

7 Common Types of Income Tax Notices for Employed People

1. Section 143(1) – Intimation Notice This is the most frequent income tax notice for salaried employees, sent automatically after ITR processing. It highlights mismatches like unreported interest income, TDS discrepancies, or calculation errors between your return and department records. How to respond: Log into the e-filing portal, check the intimation, and file a rectification if needed—no response required if it shows a refund.
2. Section 139(9) – Defective Return Notice Issued when your filed ITR is considered incomplete or erroneous (wrong ITR form, missing details, or invalid claims). Common for employed people to claim excess HRA or deductions without proper proof. How to respond: Correct and refile a revised return within 15 days to avoid it being treated as invalid.
3. Section 142(1) – Preliminary Inquiry Notice Sent if you haven’t filed your ITR despite taxable income or if the assessing officer needs more documents/clarifications post-filing. Often triggers for salaried individuals with multiple Form 16s from job switches. How to respond: Submit required documents or file the return promptly via the portal.
4. Section 143(2) – Scrutiny Notice This signals a detailed scrutiny assessment, selected manually or via CASS (computer-assisted). Reasons include high deductions, unreported income from AIS, or random selection—salaried employees often face it for mismatched savings interest or reimbursements. How to respond: Provide explanations and documents within the specified timeline; attend hearings if required.
5. Section 148 – Reassessment Notice Issued if the department believes income has escaped assessment from prior years (up to 10 years in some cases). Common for employed people with undisclosed previous employer salary or foreign income. How to respond: File a return if not filed earlier and submit objections through the portal.
6. Section 156 – Demand Notice Sent when there’s outstanding tax demand, interest, or penalty after processing or assessment. For salaried taxpayers, this often follows unresolved mismatches leading to additional liability. How to respond: Pay the demand online within 30 days or file an appeal/rectification if you disagree.
7. Section 245 – Adjustment of Refund Notice If you have a refund due but outstanding demands from previous years, the department adjusts it against arrears and informs you via this intimation. How to respond: Check prior demands on the portal and resolve them to claim full refunds.

Conclusion

Receiving one of these 7 types of income tax notices as an employed person doesn’t mean trouble—most are resolvable online through the e-filing portal with timely action. In 2025, stricter data cross-verification has increased notices for salaried individuals, but updated rules emphasize faceless proceedings, faster resolutions, and better taxpayer protections. To minimize risks, always reconcile Form 16 with 26AS/AIS before filing, report all income sources accurately, and keep documents handy. Respond promptly to any income tax notice for employed people to avoid interest, penalties, or escalation. Proactive compliance keeps your tax journey smooth and stress-free.

FAQs