Getting a notice from the Income Tax Department can feel alarming. But most of the time, especially for salaried employees, it is a routine communication — not a red flag. The key is understanding which notice you have received and what, if anything, you need to do.
This guide covers the most common income tax notices: the Section 143(1) intimation, the demand notice, the Section 143(1)(a) prima facie adjustment, the Section 142(1) inquiry notice, and the full income tax scrutiny assessment under Section 143(3).
What Is Section 143(1) of the Income Tax Act?
After you file your ITR, the Centralized Processing Centre (CPC) of the Income Tax Department processes your return automatically. Once done, it sends you an intimation under Section 143(1) — typically via email and on the e-filing portal.
This is not a scrutiny notice. It is simply the department's way of telling you that your return has been processed.
There are three possible outcomes:
| Outcome | What It Means | Action Required |
|---|---|---|
| No demand, no refund | Your calculations match the department's figures | None |
| Refund | You overpaid TDS; refund will be credited to your bank | Verify bank details on portal |
| Demand notice | A discrepancy was found; additional tax is due | Respond within 30 days |
Section 143(1)(a): Prima Facie Adjustment
If the CPC spots a discrepancy during automated processing — for example, a mismatch between your Form 26AS (TDS data) and what you declared in your ITR — it may propose a prima facie adjustment under Section 143(1)(a).
You receive a show-cause notice before any demand is raised, giving you 30 days to accept or dispute the proposed change.
Common reasons for a 143(1)(a) notice:
- TDS in Form 26AS or AIS does not match income declared in ITR
- Deduction claimed under 80C exceeds the ₹1.5 lakh cap
- Arithmetic error in the return
- Income from interest, dividends, or freelance not reported
- Exempt income incorrectly omitted from return
How to respond: Log in to incometax.gov.in, go to e-Proceedings, open the notice, and submit your response — either accepting the adjustment and paying the demand, or disagreeing and providing your explanation.
Income Tax Demand Notice Under Section 156
Once an assessment is complete (whether under 143(1) or 143(3)), if the department determines you have unpaid tax, it issues a demand notice under Section 156. This notice specifies:
- The amount of additional tax due
- Interest under Section 234A (for late filing), Section 234B (for shortfall in advance tax), or Section 234C (for deferment of advance tax)
- The deadline to pay — usually 30 days from the date of the notice
Your options on receiving a demand notice:
- Pay the demand — if you agree the calculation is correct
- File a rectification under Section 154 — if you believe the demand is due to an error in data entry or processing
- File an appeal with CIT(A) — if you dispute the underlying assessment order
Before deciding, recalculate your tax liability independently using a reliable income tax calculator. It will help you verify whether the department's figures are accurate for FY 2024-25 or FY 2025-26.
Income Tax Notice Under Section 142(1)
A Section 142(1) notice is more active than a 143(1) intimation. Your Assessing Officer (AO) sends this when they want:
- Additional documents or information before completing your assessment
- You to file a return, if you haven't already
- Your books of accounts, bank statements, or investment proofs
This notice is commonly received by salaried employees who have high-value transactions (large bank deposits, property sale, foreign income) that caught the department's attention.
You must respond within the time stated in the notice. Failure to comply can result in the AO doing a best judgement assessment under Section 144, which usually produces an unfavorable outcome.
Income Tax Scrutiny Notice: Section 143(2) and Scrutiny Assessment Under 143(3)
A scrutiny notice under Section 143(2) is the most serious type. It means your return has been selected for a full scrutiny assessment under Section 143(3), where an Assessing Officer will examine your return in detail.
The 143(2) notice must be issued within six months from the end of the assessment year in which the return was filed. So for FY 2024-25 (AY 2025-26), the deadline for issuing a scrutiny notice is September 30, 2026.
Why Returns Get Selected for Scrutiny
The Income Tax Department uses risk-based criteria and AI profiling. Common triggers include:
- Significant mismatch between income declared and TDS/high-value transactions in AIS
- Large cash deposits not explained by income
- Unusually high deductions relative to income
- Capital gains from property sale or equity not fully reported
- Foreign income or assets
- Specific high-risk industries or professions
- Mismatch with information received from third parties (banks, mutual funds, registrars)
The Scrutiny Assessment Process
- You receive a Section 143(2) notice in your email and on the e-filing portal
- The AO sends a questionnaire or asks for specific documents via e-Proceedings
- You submit responses and supporting documents through the portal
- The AO may ask follow-up questions (several rounds are common)
- The AO issues a final assessment order under Section 143(3)
- If additional tax is due, a demand notice under Section 156 follows
For a scrutiny assessment, it is strongly advisable to engage a Chartered Accountant. The process involves detailed correspondence and document submission.
Income Tax Scrutiny vs. Reassessment
An income tax reassessment (under Sections 147 and 148) is different from a scrutiny assessment. Reassessment is initiated when the department believes income has escaped assessment in a year that was already assessed. The AO must have "reasons to believe" — it cannot be done purely on suspicion.
If you receive a Section 148 notice, it means the department is reopening a past assessment year. The time limit is generally three years from the end of the relevant assessment year (or up to ten years in cases of concealment over ₹50 lakh).
Quick Reference: Income Tax Notices at a Glance
| Notice Type | Section | Who Sends It | Common Reason | Response Time |
|---|---|---|---|---|
| Intimation (no demand) | 143(1) | CPC | ITR processed, matches | None needed |
| Prima facie adjustment | 143(1)(a) | CPC | Discrepancy found | 30 days |
| Demand notice | 156 | CPC / AO | Tax due after assessment | 30 days |
| Inquiry notice | 142(1) | AO | Needs documents/info | As stated in notice |
| Scrutiny notice | 143(2) | AO | Selected for full scrutiny | As stated in notice |
| Reassessment notice | 148 | AO | Income escaped assessment | 30 days |
What Salaried Employees Should Do If They Get a Notice
- Don't panic — most 143(1) intimations are routine and require no action
- Check which section it is under — the notice will state this clearly
- Verify your AIS and Form 26AS — compare with your ITR to spot the discrepancy
- Recalculate your tax — use a reliable income tax calculator to check if the department's demand figure is correct
- Respond on time — every notice has a deadline; missing it can worsen the outcome
- Consult a CA for 142(1) or 143(2) notices — these require professional help
Understanding the type of notice you received is half the battle. For routine 143(1)(a) adjustments, a careful response through the portal is usually sufficient. For a full income tax scrutiny assessment, take it seriously and seek professional guidance.