Income Tax Notice These 7 Notices Frequently Come to Employed Taxpayers in 2025

Income Tax Notice: These 7 Notices Frequently Come to Employed Taxpayers in 2025

by

Introduction

Salaried employees often assume that TDS deductions and Form 16 make them immune to income tax scrutiny, but the Income Tax Department frequently sends notices even to regular taxpayers. With increased use of data analytics, AIS (Annual Information Statement), and cross-verification of third-party data, many employed individuals are receiving income tax notices for minor discrepancies or unreported income. Understanding the common types of income tax notices sent to employed people, along with the latest rules and response guidelines, can help you avoid penalties, interest, or prolonged scrutiny. Here are the 7 most frequent income tax notices that salaried taxpayers receive in 2025-26 and what you should do when one lands in your inbox.

7 Common Types of Income Tax Notices Received by Employed People

  1. Notice under Section 143(1) – Preliminary Assessment This is the most common automated notice sent after ITR processing. It highlights mismatches between your filed return and data reported in Form 16, Form 26AS, or AIS (e.g., extra TDS credit claimed or unreported interest income). Response: Log in to the e-filing portal, agree/disagree with the demand, and file a revised return if needed within 30 days.
  2. Notice under Section 142(1) – Inquiry Before Assessment Sent when the department needs additional documents or clarification (e.g., high-value transactions, unexplained investments, or large deductions claimed under Section 80C/80D). Response: Upload requested documents online or attend the assessing officer’s office with proofs within the stipulated timeline.
Bank Merger News: Government Set for Huge Bank Mergers in 2026
  1. Notice under Section 139(9) – Defective Return Notice Issued if your ITR is considered defective (missing schedules, incorrect personal details, or unclaimed TDS). Response: File a corrected return within 15 days of receiving the intimation to avoid it being treated as non-filed.
  2. Notice under Section 148 – Reassessment of Income If the department believes income has escaped assessment (e.g., unreported capital gains or foreign income detected later), they can reopen returns up to 3–10 years old depending on the case. Response: File a return if asked and provide explanations; seek professional help as these can escalate.
  3. Notice under Section 156 – Demand Notice Sent when tax, interest, or penalty is due after assessment (often accompanies 143(1) or scrutiny outcomes). Response: Pay the outstanding amount within 30 days via the e-filing portal to avoid recovery proceedings.
  4. Notice under Section 245 – Adjustment of Refund Informs you that your current-year refund will be adjusted against past pending demands. Response: Check validity of old demands; file an online rectification or appeal if the demand is incorrect.
  5. Notice under Section 271(1)(c) – Penalty for Concealment Levied if the department finds deliberate under-reporting or furnishing inaccurate particulars (rare for salaried but possible in high-discrepancy cases). Penalty can be 100–300% of tax evaded. Response: Strongly contest with evidence; professional representation is highly recommended.

Conclusion

Receiving an income tax notice doesn’t automatically mean you’ve done something wrong—many are routine verification requests triggered by data mismatches. The key is to respond promptly and accurately through the e-filing portal to avoid interest, penalties, or escalation. Always cross-check Form 26AS and AIS before filing your ITR, report all income sources (even small bank interest), and keep investment proofs handy. For complex notices like reassessment or penalty proceedings, consulting a chartered accountant early can save significant time and money. Stay compliant, stay informed, and turn what feels like a headache into a quick resolution.

Leave a Comment