How to Respond to a Section 143(1) Notice for Tax Mismatch

Dipali Waghmode
Dec 2, 2025
8 min read

Section 143(1) of the Income Tax Act pertains to the preliminary processing of Income Tax Returns (ITRs) filed by taxpayers. It is often the first stage in the tax assessment process where the Income Tax Department checks for discrepancies in the returns, such as misreported income, discrepancies in tax payments, or mismatches in TDS (Tax Deducted at Source) credits. If the department finds any issues, it can issue a notice under Section 143(1) to the taxpayer, highlighting these mismatches or errors. This notice is not a tax audit but serves as an initial step for resolving discrepancies before the final assessment. Let us explore what triggers a Section 143(1) notice, how to respond to it effectively, recent rule changes that impact this process from 2025 onwards, and how to handle such notices online.

What Triggers a Section 143(1) Notice for Tax Mismatch?

A Section 143(1) notice is generally triggered when the Income Tax Department identifies discrepancies or mismatches in the taxpayer’s filed ITR. Some common causes include:

Mismatched Tax Credits: If the TDS (Tax Deducted at Source) credited in your return does not match the TDS reflected in Form 26AS or the data available with the department, a notice can be issued to reconcile the mismatch.
Income Discrepancies: If the income reported in your ITR is higher or lower than what is declared by your employer or other institutions (e.g., banks, financial institutions), a mismatch could trigger this notice.
Errors in Deductions or Exemptions: Sometimes taxpayers incorrectly claim deductions or exemptions, such as HRA or 80C investments, without valid supporting documents. This can cause the system to flag such claims.
Discrepancies in Reported Taxable Income and Payment: If there is an inconsistency between the taxable income declared in the ITR and the tax paid as per the records with the Income Tax Department, the system may generate a Section 143(1) notice.
Mismatch in Advance Tax Payments: If the advance tax payments or self-assessment tax claimed by the taxpayer do not match the data available with the department, a notice will be issued to address this discrepancy.

In essence, any data inconsistency between the taxpayer's return and the department’s records can trigger a Section 143(1) notice.

Step-by-Step: How to Respond to a Section 143(1) Notice for Tax Mismatch

Review the Notice: Once you receive a Section 143(1) notice, the first step is to carefully review the notice. It will mention the areas of discrepancy, such as incorrect TDS claims, mismatched income, or any differences in tax credits. Take note of the nature of the error and the specific section mentioned in the notice.
Verify the Mismatch: Compare the details provided in the notice with your own records, including Form 26AS, your ITR filing, and any supporting documents. Verify the accuracy of the data reported, such as income, TDS deductions, and advance tax payments.
Rectify the Error: If you find any discrepancies, such as incorrect reporting of income, TDS, or deductions, correct them. Ensure that all figures align with the data available in official forms like Form 16, Form 26AS, or any other supporting documents.
Respond to the Notice: If the discrepancies are identified and corrected, you can respond to the notice. In many cases, the Income Tax Department allows taxpayers to provide explanations or submit the corrected data through the e-filing portal. Log into the Income Tax Department portal and select the appropriate option to file your response to the notice.
Submit Additional Documentation: If requested by the department, submit the necessary documents that support your claims. For example, if the issue relates to TDS mismatches, you may need to submit the corrected Form 26AS or other proof of TDS payments.
Track the Status: After submitting your response, monitor the status of the notice through the Income Tax Department’s portal. You may receive further clarification requests or updates on your case.
Pay Additional Tax if Necessary: If the mismatch results in a higher tax liability, you will be required to pay the outstanding tax along with any applicable interest and penalties.

Recent Rule Changes (2025 Onwards)

Recent rule changes introduced in 2025 have impacted how Section 143(1) notices are processed and responded to. Key changes include:

Faster Processing of Notices: The Income Tax Department has streamlined the processing of Section 143(1) notices. As part of its push for a more efficient system, the department has incorporated AI-based tools to better match data, which could reduce the chances of manual errors and increase the speed of notice issuance.
Increased Accuracy in Data Matching: The tax department has integrated new systems to automatically cross-check more data points, such as TDS credits and income sources, making it more difficult for discrepancies to go unnoticed. This should reduce the number of notices based on data mismatch errors but could also increase scrutiny on more complex filings.
Extended Response Time: Taxpayers now have a slightly longer window to respond to Section 143(1) notices. Previously, the time frame for submitting a response was shorter, but as part of the new changes, taxpayers now have more time to review the notice and make necessary corrections without facing automatic penalties.
Automation in Communication: The communication process has also become more automated, with taxpayers receiving notifications through email and SMS. This aims to make the response process more streamlined and ensure that taxpayers are aware of the status of their notice.

These changes aim to make the entire process of dealing with Section 143(1) notices more efficient and taxpayer-friendly, reducing the chances of unnecessary penalties.

Responding Online

Responding to a Section 143(1) notice online is a straightforward process through the Income Tax Department’s e-filing portal. Here are the steps:

Log in to the e-Filing Portal: Visit the official Income Tax Department’s e-filing portal and log in using your PAN and password.
Navigate to the Notices Section: Once logged in, go to the “Income Tax Return” section and click on “View Filed Returns.” Here, you will find any notices issued against your ITR.
Select the Relevant Notice: Choose the Section 143(1) notice that you received and click on it to view the details.
File a Response: In the notice details, select the option to “Respond to Notice.” Here, you can upload any documents, provide clarifications, or submit corrected data.
Submit and Track: After submitting your response, you can track the status of your submission. You will be notified if any further action is required or if the matter has been resolved.

Conclusion

A Section 143(1) notice for tax mismatch can be an intimidating process, but with careful review, proper correction, and timely response, it can be resolved without much hassle. The recent rule changes make the process more streamlined, and taxpayers now have a bit more time and automated support for handling these notices. Ensuring that your data is accurate and consistent across all forms is key to avoiding these notices in the first place. By following the steps outlined above, you can effectively respond to a Section 143(1) notice and ensure that your tax filing remains compliant with the Income Tax Act.

For a more simplified and efficient filing experience, it is highly recommended to download theTaxBuddy mobile app for an easy, secure, and hassle-free solution to manage your tax filing and notices effectively.

FAQs

Q1: What does a Section 143(1) notice mean?

A Section 143(1) notice is a communication from the Income Tax Department indicating discrepancies or mismatches in the Income Tax Return (ITR) filed by the taxpayer. This notice usually arises when there are issues such as incorrect income reporting, mismatched TDS credits, or errors in deductions and exemptions claimed. It is a preliminary step taken by the Department to highlight areas requiring further review or correction before finalizing the tax computation.

Q2: How do I check if I received a Section 143(1) notice?

To check if you’ve received a Section 143(1) notice, log in to the official Income Tax Department’s e-filing portal. Navigate to the “Income Tax Return” section, where you can view your filed returns and any notices issued. If a Section 143(1) notice has been issued, it will be displayed there along with relevant details, which may include the nature of the discrepancies and the action required from you.

Q3: What happens if I ignore a Section 143(1) notice?

Ignoring a Section 143(1) notice can have serious consequences. Failure to respond within the specified time frame can lead to penalties, interest on unpaid taxes, or even further scrutiny of your returns. The Income Tax Department may issue additional notices, and unresolved discrepancies could result in tax audits or reassessments. In extreme cases, it could lead to penalties or legal action.

Q4: Can I file a revised return if I receive a Section 143(1) notice?

Yes, you can file a revised return if you find errors in your original filing after receiving a Section 143(1) notice. It is advisable to first respond to the notice, addressing the discrepancies or providing clarification, before filing a revised return. The revised return allows you to correct any errors in your original return, including any mistakes highlighted in the Section 143(1) notice.

Q5: How long do I have to respond to a Section 143(1) notice?

The response time for a Section 143(1) notice varies depending on the notice’s content and the instructions issued by the Income Tax Department. Typically, taxpayers are given between 15 and 30 days to respond to the notice. However, this period may be shorter or longer based on the specifics of the case, so it is crucial to read the notice carefully to understand the exact deadline.

Q6: What if I disagree with the tax department's findings in the Section 143(1) notice?

If you disagree with the findings of the Section 143(1) notice, you can file a response outlining your objections and providing supporting evidence or documentation that justifies your position. If necessary, you can also file an appeal with the Commissioner of Income Tax (Appeals), presenting your case for review. The appeal process allows taxpayers to contest the findings before a higher authority.

Q7: What documents are required to respond to a Section 143(1) notice?

To respond to a Section 143(1) notice, you will generally need to provide various supporting documents. These may include proof of income (such as salary slips or income statements), TDS certificates (such as Form 16 or Form 26AS), and any other documents that support the deductions or exemptions you claimed. These documents help clarify the discrepancies pointed out by the notice and ensure the correct assessment of your tax return.

Q8: How long does it take for the department to process a Section 143(1) response?

The processing time for a Section 143(1) response varies depending on the complexity of the discrepancies and the volume of responses the department is handling. Generally, it may take a few weeks for the Income Tax Department to process the response and issue an updated assessment. In some cases, if additional documents or clarification is needed, the process may take longer.

Q9: Will I receive a penalty if I do not respond to a Section 143(1) notice?

Yes, failing to respond to a Section 143(1) notice can result in penalties. The Income Tax Department may impose additional taxes or interest on unpaid dues, and repeated failure to respond can lead to further legal and financial consequences. It is important to address the notice promptly to avoid escalation and additional penalties.

Q10: Can I appeal a Section 143(1) notice?

Yes, you can appeal a Section 143(1) notice if you believe the notice is incorrect or unjustified. After responding to the notice, you can file an appeal with the Commissioner of Income Tax (Appeals). The appeal process allows you to present evidence or arguments that challenge the findings of the tax department, potentially leading to a revision or cancellation of the notice.

Q11: Does the Section 143(1) notice apply to all taxpayers?

Yes, Section 143(1) notices can apply to all taxpayers who file an ITR, as they are issued when the Income Tax Department identifies discrepancies or errors during the processing of the return. These notices are part of the standard procedure to ensure tax compliance, and they can be triggered by issues like mismatched TDS, wrong deductions, or unreported income.

Q12: Can I resolve a Section 143(1) notice through the TaxBuddy platform?

Yes, TaxBuddy can assist in resolving Section 143(1) notices by helping you identify the discrepancies, verifying the information, and guiding you on how to respond to the notice. The platform can also help ensure that the correct data is submitted to the Income Tax Department, and provide you with professional advice or assistance in case the discrepancies require more detailed corrections.