Demand cut from ₹10,050 to ₹1,310
TaxSavvy for TDS default notice
TRACES default notice? Clear it with one correction.
We read the default, file the correction and pay only what is due.
If you wait: Interest of 1% to 1.5% a month on late TDS (Sec 398(3), old 201(1A))
How we get it done
Four steps, the same for every job. You see each one ticked.
Information
TRACES login with admin rights. Latest token number or ARN
Discussion
What does the intimation or justification report list: short payment, short deduction, interest, late fee or PAN?. Was the tax actually paid, perhaps in a challan tagged to another quarter?
Forms
Download the justification report: Default tab > Request for Justification Report Download; open in TRACES utility. Pay any genuine short payment, interest or late fee by challan
Deliverables
Correction request number and 15-digit token. Revised intimation with demand cleared
See what you get, free
Real formats, made with dummy data.
Sample Sample ₹30,700 leaking every month
Sample Books from your bank statement
13 bank lines, books balanced
Questions, answered the CA way
Facts, Provisions and law, Analysis, Conclusion.
Section 270(1) (old 143(1)): Intimation and Demand
- Facts
- The most common IT notice, sent automatically by the CPC computer. Not a scrutiny notice. Not a raid. But if ignored or mishandled, the demand amount gets locked and interest begins. Most Sec 270(1), Income-tax Act 2025 (old Sec 143(1)) demands can be reduced to zero.
- Provisions and law
- Sec 270(1) (old 143(1)); Sec 270(2) (old 143(1)(a)); Sec 289 (old 156); Sec 154; Sec 263(5) (old 139(5))
- Analysis
- What triggers Sec 270(1) (old Sec 143(1)) demand: (1) AIS shows income not declared in ITR, most common. (2) TDS in Form 168 (old Form 26AS) not matching claimed TDS in ITR. (3) Deduction claimed exceeds limit. (4) Arithmetical mistake in ITR. (5) Carried-forward loss claimed without filing return in loss year. Three possible Sec 270(1) (old Sec 143(1)) outcomes: (A) Refund, CPC agrees with your return, issues refund. (B) No demand, no refund, CPC processing matches your return. (C) Demand, CPC finds discrepancy, raises a demand. Do NOT just pay the demand: Sec 270(1) (old Sec 143(1)) demands are often incorrect. In the most common case, FD interest in AIS that taxpayer forgot to declare, the demand is valid but the penalty is avoidable. In the second most common case, TDS credit mismatch due to PAN error by employer, demand is incorrect and should be rectified. Response options: (A) Agree, pay demand.
- Conclusion
- Download Sec 270(1) (old Sec 143(1)) intimation PDF from IT portal, check exact demand amount and reason
- Compare CPC's income computation vs your filed ITR line by line
- Check AIS, identify which item CPC flagged as not declared
- Check Form 168 (old Form 26AS) TDS credits vs TDS you claimed in ITR, any mismatch?
Section 143(2) (now 270(8)), Scrutiny notice: the real assessment begins
- Facts
- Sec 143(2) (now Sec 270(8), Income-tax Act 2025) means the IT department has selected your return for detailed scrutiny. A human AO (Assessing Officer) or faceless assessment unit will examine specific items in your return. The notice will say what is being questioned, income, deductions, transactions.
- Provisions and law
- IT Act 1961, Sec 143(2) (now 270(8)) | Time limit: 3 months from end of AY | Notice must be issued within 3 months of end of AY (for AY 2024-25 → by 30 June 2025)
- Analysis
- Types of scrutiny: • CASS (Computer Aided Scrutiny Selection): System-selected based on risk parameters, high cash deposits, large deductions, mismatch with TDS data. • Manual scrutiny: AO specifically selected your case, usually means a tip-off or serious red flag. Sec 143(2) (now Sec 270(8)) leads to a formal assessment under Sec 143(3) (now Sec 270(10)). You must respond, ignoring it results in best judgment assessment (AO assumes the worst and raises a demand without hearing you).
- Conclusion
- Check the notice date, if beyond the time limit, the notice is invalid. File a legal objection immediately.
- Read exactly what is being questioned, don't respond to what isn't asked
- Do NOT submit documents before reading the full notice, scope creep is common
- Engage a CA immediately, your response creates a paper trail that affects all future proceedings
Section 270(8) (old 143(2)): Scrutiny Notice
- Facts
- This is NOT automated, a human officer has selected your return for detailed examination. Specific income, deduction, or transaction is under review. Must be responded to with documentary evidence within the timeline given.
- Provisions and law
- Sec 270(8) (old 143(2)); Sec 270(10) (old 143(3)); Sec 144; Faceless Assessment Scheme 2020; Sec 271(1)(c)
- Analysis
- Why your return was selected: (1) Large refund claim, officer verifies legitimacy. (2) High deductions claimed relative to income (e.g. Sec 123, Income-tax Act 2025 (old Sec 80C) of ₹1.5L on ₹3L income). (3) AIS shows transactions not declared (property purchase, large FD). (4) Specific issue risk profiling by IT department. (5) Information from third party (bank, registrar). Faceless assessment, how it works: Notice arrives on IT portal (also email). You respond online through IT portal → e-Proceedings → Response. Upload documents in PDF. No personal appearance. Officer is anonymous, from a different city. National Faceless Assessment Centre (NFAC) coordinates. What to submit: Depends on the specific query in the notice. Common documents: Bank statements, salary slips + Form 130 (old Form 16), investment proofs (ELSS receipts, PPF passbook), home loan certificate, rent receipts, capital gains statement, property registration documents.
- Conclusion
- Login to IT portal → e-Proceedings → View notices (Sec 270(8) (old Sec 143(2)) notice visible)
- Read notice carefully, identify exactly which item / transaction is under scrutiny
- Note response deadline from notice, calendar the date immediately
- Gather all documents related to the queried item (not your entire file)
Form 130 (old Form 16): Part A and Part B Decoded
- Facts
- Form 130 (old Form 16) is the salary TDS certificate, the most important document for a salaried person's ITR. Most employees receive it but don't know how to use it. Part A shows TDS deposited with the government. Part B is the salary breakup prepared by the employer. Errors in Form 130 (old Form 16) cause ITR mismatches and demands.
- Provisions and law
- Sec 395(4) (old 203); Rule 215 (old Rule 31); TRACES system; Sec 392 (old 192(2B))
- Analysis
- Form 130 (old Form 16) Part A, what to check: (1) Employer TAN must match what's in your Form 168 (old Form 26AS). (2) Your PAN must be correct. (3) TDS amount quarter-wise must match your Form 168 (old Form 26AS) and AIS. (4) "Amount paid / credited" = your gross salary for each quarter. (5) If employer changed TAN mid-year (company restructuring): multiple Part As may exist. Form 130 (old Form 16) Part B, the salary breakup: Shows: Basic salary, HRA, special allowance, LTA, bonus, perquisites. Deductions: Sec 123, Income-tax Act 2025 (old Sec 80C) investments, Sec 126 (old Sec 80D) health insurance, home loan interest (24b), standard deduction ₹75K. Taxable salary after deductions. TDS schedule with advance tax if any. This is what flows into your ITR Schedule S (Salary) and should match your AIS salary figure. Common Form 130 (old Form 16) errors: (1) Old investments not included in Part B (employer didn't update after you submitted Form 124 (old Form 12BB)). (2) HRA exemption computed wrong (wrong city classification).
- Conclusion
- Receive Form 130 (old Form 16) from employer by June 15 (if not received: email HR immediately)
- Check Part A: TAN, your PAN, period of employment, TDS figures, match with Form 168 (old Form 26AS)
- Check Part B: salary breakup is complete, Basic, HRA, allowances, perquisites, bonus
- Verify deductions in Part B: Sec 123, 126, 22(1)(b) (old Sec 80C, 80D, 24(b)), NPS Sec 124 (old Sec 80CCD(2)), standard deduction ₹75K
TRACES default notice? Clear it with one correction.
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