How to Respond to an Income Tax Scrutiny Notice Effectively in 2025

Received an income tax scrutiny notice? Learn how to respond step-by-step with clarity and confidence. This guide covers everything—from understanding the notice to drafting a proper reply.

Introduction

Receiving a notice from the Income Tax Department can be stressful, especially if you’re not familiar with the process. You may be wondering: Why did I get this notice? Am I in trouble? What do I do next?

First, take a deep breath. A scrutiny notice doesn’t automatically mean that you’ve done something wrong or that there’s a penalty waiting for you. It’s simply a way for the tax department to verify the details of your income tax return—whether it’s related to income, deductions, high-value transactions, or mismatches in data.

The important thing is how you respond and do so on time and with the proper documents.

This article is written to guide you through the process in a simple, step-by-step manner. Whether you’re a salaried individual, a business owner, or a professional, we’ll help you understand what a scrutiny notice is, what documents you’ll need, how to respond effectively, and when to seek professional help.

Let’s begin by understanding what a scrutiny notice really means.

What is an Income Tax Scrutiny Notice?

An Income Tax scrutiny notice is an official communication from the Income Tax Department indicating that your return has been selected for a detailed examination. Legally, it is issued under Section 143(2) or Section 142(1) of the Income Tax Act, 1961, and forms part of the assessment proceedings conducted by the Assessing Officer (AO).

The issuance of such a notice means that your case requires further inquiry by the department—beyond the basic automated processing of returns under Section 143(1). Even if you’ve already received an intimation under Section 143(1) or received a refund, you can still be selected for scrutiny under Section 143(2).

What Does It Mean for You?

Receiving a scrutiny notice does not imply wrongdoing, but it does mean that the Income Tax Department is taking a closer look at your return. The process is entirely legal and procedural, and your cooperation, timely response, and proper documentation will ensure a smooth outcome.

Why Are Returns Selected for Scrutiny?

The Income Tax Department selects cases for scrutiny based on a combination of risk-based criteria and random selection algorithms. Some returns are picked through a Computer-Assisted Scrutiny Selection (CASS) system, while others are chosen manually based on red flags identified by assessing officers. Common reasons include:

• Mismatch in income details as reported in Form 26AS, AIS, or TIS compared to the filed return
• High-value transactions such as purchase or sale of property, large cash deposits, or high credit card spending
• Significant refunds claimed or losses carried forward, especially if not adequately supported by documents
• Discrepancies in tax deducted (TDS) versus income reported
• Foreign travel or foreign income declared without a commensurate income level
• Non-filing of returns despite visible financial activity
• Random selection for verification under departmental guidelines

It’s important to note that a scrutiny selection does not necessarily indicate fraud or concealment. Often, it’s just a trigger for further verification to ensure the accuracy and completeness of the return filed.

Why Updating Your Email and Mobile Number is Very Important in Income Tax Scrutiny

If you’ve filed your income tax return, one simple thing you must do is make sure your email ID and mobile number are up to date on the Income Tax Portal. Why? Because the Income Tax Department doesn’t send notices by post anymore. All important messages—whether it’s a scrutiny notice, a reminder, or even a refund update—are sent through email or SMS only.

What is the official Email id of communication by Income Tax Department

Most notices and updates come from this official email ID donotreply@incometax.gov.in. However, in some cases, you may receive the notices from a different email, but the domain of the email will always be www.incometax.gov.in.

So, if you ever get an email from this address, don’t ignore it. It might be something important that needs your attention. Sometimes, the messages also come by SMS.

Why the Email from incometax.gov.in should not be ignored?

There have been many cases where people missed these emails or messages, either because:

• Their old email or mobile number was still on the portal
• The email went to spam
• They weren’t checking their inbox regularly

Because of this, they didn’t reply to the notice on time and guess what? The department assumed they had nothing to say and passed an order adding extra tax or disallowing deductions. In some cases, people got hit with huge tax demands all because they missed a simple message.

Fixing this later is not easy. It can take months of follow-ups, appeals, and paperwork.

How to update your Email and Mobile on the Income Tax Portal

• Go to www.incometax.gov.in
• Log in and go to “My Profile” → “Contact Details”
• Check if your email and mobile are:
  • Working
  • Personal (not your accountant’s or someone else’s)
  • Checked regularly

Also, make sure to check your spam folder from time to time, just in case any important email lands there.

Quick Tip:

If you ever get a message or email from the Income Tax Department, don’t panic, but don’t ignore it either. Read it carefully and respond in time. If you’re not sure what to do, it’s best to talk to a tax expert.

Can there be multiple notices in an Income Tax Scrutiny?

Getting a scrutiny notice is just the beginning. Think of it as the start of a back-and-forth conversation with the Income Tax Department. This process usually goes on for a few weeks (sometimes months), and you’ll be expected to respond multiple times, each time within a deadline.

The First Notice is an Intimation of selection of case in scrutiny

Don’t panic when you see the first notice. It usually doesn’t ask for any documents.
All you need to do at this stage is:

• Make sure your Income Tax Return is filed, and
• Upload your Computation of Income for that year

That’s it—for now.

Questionnaire under Income Tax Scrutiny Notice

Once the scrutiny starts, the department will send a questionnaire, a list of points they want you to explain. These may include:

• Sources of income
• High-value expenses or investments
• Bank account details
• Property purchases or cash transactions

Here’s the smart way to reply:

Respond to each point one by one, in the same serial number order. This makes it easy for the officer to read and understand your reply and it also shows that you’re being organized and transparent.

Can you request for additional time for filing the reply?

If you don’t have all the documents or answers right away, no problem. Just:

• Mention which point(s) you need more time for
• Politely request to submit those in your next response

But don’t forget: You must reply to those pending points later. Skipping them again can cause serious trouble in your case.

Why are deadlines important in Income Tax Scrutiny?

Every time you get a notice or questionnaire, it will come with a deadline, usually 7 to 15 days.

Ignoring these deadlines can:

• Create a bad impression with the Assessing Officer
• Lead to assessment without hearing your side
• Result in penalties for non-compliance

Even if you need more time, always request an extension before the due date—never go silent.

Quick Tip: Be Timely, Be Clear, Be Smart

The way you handle a scrutiny notice can make all the difference.

• Reply on time
• Be clear and honest
• Use proper serial number format
• Don’t leave any point unanswered

And if you feel overwhelmed, don’t try to handle it alone, get expert help. A well-replied scrutiny is half the battle won.

How to Prepare a Proper Reply to the Income Tax Department

When responding to an Income Tax scrutiny notice, your written reply is your voice. You’re not speaking to the Assessing Officer (AO) directly you’re presenting your case purely through documents and written explanation. That’s why it’s essential to craft your reply with clarity, professionalism, and courtesy.

Here’s how to do it right:

Use Clear, Courteous, and Professional Language

Always keep your tone:

• Respectful (even if you disagree with the queries)
• Fact-based (avoid emotional arguments)
• Polite and neutral (never use aggressive or negative language)

Remember, your goal is to help the AO understand your side clearly. A well-mannered and well-drafted reply goes a long way in building trust.

Explain the Facts Simply—Even if They Are Complex

If your case involves complex transactions, try to break the explanation down into simple, easy-to-understand steps:

• Write short paragraphs
• Avoid jargon
• Use real-life terms (e.g., “salary received in two parts” or “loan repaid through bank transfer”)
• Help the AO see the complete picture without making assumptions
• A reply that flows naturally and makes logical sense always leaves a positive impression.

Structure Your Reply Point-by-Point

Respond to each question or issue serial number-wise (based on the questionnaire or notice)

Write the question first, followed by your answer, and then mention the supporting annexure

For example:

“In response to Point No. 4: The amount of ₹2,50,000 deposited in Bank A/c XXXX was received as salary arrears. Please refer Annexure-D for Form 16 and salary slips.”

Attach Properly Scanned Supporting Documents

All documents submitted (proofs, statements, bills, agreements) should be:

• Scanned clearly and fully visible
• Properly labelled and arranged
• Within 5 MB file size limit per document
• You can submit multiple files if needed

Pro Tip: File Naming Makes a Big Difference

Name your attachments like this:

• Annexure-D_BankStatement_SBIAccount.pdf
• Annexure-F_RentAgreement_JaipurFlat.pdf

This small habit helps the AO easily locate and refer to your documents, and builds your image as a responsible and organized taxpayer.

To Sum Up

Handling an income tax scrutiny notice may seem stressful at first—but with the right approach, it can be managed smoothly. The key is to stay calm, stay organized, and respond on time. Your written reply is your only voice during the scrutiny process, so make sure it’s clear, professional, and supported by proper documentation.

If you ever feel unsure or the matter is complex, don’t hesitate to seek help from a tax professional. A well-prepared reply not only protects your interest but also builds your credibility in the eyes of the department.

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