How should taxpayers respond to an income tax notice in August 2026

The first step is to read the notice carefully and understand the reason for its issuance, along with the section under which it has been issued.

"Usually, these notices are issued to seek clarity or resolve small mismatches in the return already filed. Taxpayers should first check the authenticity of the notice on the e-filing portal using the DIN. After logging in, they can go to Pending Actions and access e-Proceedings to view the details," said CA Siddharth Maurya, Managing Director of Vibhavangal Anukulkara Pvt Ltd.

Once the notice is verified, taxpayers should compare the details mentioned in it with their ITR, Form 26AS, Annual Information Statement (AIS) and other relevant documents. If a response is required, it should be submitted through the income tax e-filing portal within the deadline mentioned in the notice.

"Taxpayers should not ignore a notice. Non-response may lead to penalties, additional tax demands or further proceedings. If the notice is issued due to an error in the ITR, taxpayers should take corrective action as per the applicable provisions," said Abhishek Soni, CEO and Co-founder, Tax2win.

Understanding the section mentioned in the notice

Every income tax notice mentions the section under which it has been issued. Understanding this section is important because the response required may differ depending on the nature of the notice.

"Common sections include 143(1) for intimation after processing of returns, 143(2) for scrutiny proceedings, 148 for reassessment and 156 for tax demand notices. Identifying the section is the first step towards deciding the right course of action," said Shourya Garg, Advocate at Garg & Garg Tax Associates.

How to respond to an income tax notice

After understanding the notice, taxpayers should collect all supporting documents, including their filed ITR, Form 26AS, AIS and other financial records.

• Log in to the income tax e-filing portal at incometax.gov.in.

• Go to the e-Proceedings section.

• Select the relevant notice and submit a response along with supporting documents, wherever required.

• Ensure that each query raised in the notice is addressed clearly.

"Taxpayers should never ignore a notice. Even if they believe it has been issued incorrectly, submitting a formal response is the safer approach. Ignoring it can result in ex parte assessment, penalties and, in certain cases, further legal action," said Shourya Garg.

"Taxpayers should prepare their reply point by point and keep supporting evidence ready. Documents such as Form 16, bank statements and deduction proofs can help explain the information submitted in the return. The response should be filed through the e-Proceedings module within the timeline specified in the notice," said CA Siddharth Maurya.

If a taxpayer needs additional time to respond, they should request an extension through the portal before the deadline expires rather than waiting until the last moment. A timely and accurate response can help avoid unnecessary complications.