A comprehensive legal guide on handling direct tax notices, 1961 vs 2025 Act transition, and compliant responses.
A comprehensive legal guide on handling Income Tax notices under Sections 142(1), 143(2), and 148 of the Income-tax Act, 1961, and their corresponding provisions under the Income-tax Act, 2025.
An Income Tax notice is a formal inquiry or administrative verification, not an assertion of wrongdoing. Under the transitional framework of the Income-tax Act 2025 (Section 536), proceedings for AY 2025-26 and prior years continue under the 1961 Act. Always verify the Document Identification Number (DIN) and submit point-by-point factual replies with documentary evidence before the deadline.
Understanding the governing law for your tax notice
With the enforcement of the Income-tax Act, 2025 on 1 April 2026, direct tax proceedings operate under a dual-track transition mechanism governed by Section 536.
Proceedings for Assessment Year 2025-26 and prior financial years remain strictly governed by the Income-tax Act, 1961. Proceedings for FY 2026-27 (AY 2027-28) onwards fall under the Income-tax Act, 2025.
Issued seeking documentation, accounts, or return filing prior to assessment completion.
Issued when a return is selected for detailed scrutiny to verify claims and deductions.
Issued when the Assessing Officer has information suggesting income escaped assessment.
Clear answers to common client questions
First, verify the notice validity by checking the Document Identification Number (DIN) on the Income Tax e-Filing portal. Note the section under which it is issued, the relevant Assessment Year, and the compliance due date.
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