How to Respond to an Income Tax Proposed Adjustment Notice Under Sections 143(1)(a) and 270(1)(a)

What is a proposed adjustment notice?

After you file an income tax return, the Centralised Processing Centre (CPC) may find a mismatch between your return and information available to the Income Tax Department. Before making certain adjustments while processing the return, it sends a proposed adjustment communication and gives you an opportunity to respond.

For returns governed by the Income-tax Act, 1961, the relevant provision is Section 143(1)(a). The corresponding provision under the Income-tax Act, 2025 is Section 270(1)(a).

A proposed adjustment is not the same as a final tax demand or a scrutiny assessment. It is a chance to agree with or explain a proposed change before your return is processed. Read the communication and any annexures carefully. They should identify the return and the item or amount the CPC proposes to adjust.

Which section applies?

The applicable law depends on the period covered by the return, not simply when you receive the communication.

The 1961 Act continues to govern returns and proceedings for periods before 1 April 2026 under the transition provisions, even when a return or notice is handled after that date. Check the section number on your communication and follow the current instructions in your e-Filing account.

Common reasons for a proposed adjustment

The processing provisions allow only specified types of adjustments. Depending on the law applicable to the return, these may include:

• An arithmetic error in the return.
• A claim that appears incorrect based on information in the return.
• Certain inconsistencies with information in an earlier-year return.
• A loss claim that does not meet the statutory filing-time requirements.
• An expense disallowance or income amount shown in a tax audit report but not reflected in the return.
• A deduction that is not available because the return was filed late.

A mismatch does not automatically mean that you are wrong. An amount may be listed in the wrong schedule, a tax credit may not have been matched correctly, or a deduction may be supported by records that were not obvious from the return. Compare the proposed adjustment with your filed return and supporting documents before responding.

If the issue requires a detailed investigation or involves disputed facts, do not assume the proposed adjustment proves your claim is invalid. Explain the facts clearly and support your response with relevant records.

The response deadline

The Income Tax Department states that a response to a Section 143(1)(a) communication is due within 30 days from the date it is issued. Section 270(1)(a) also provides a 30-day period to respond to a proposed adjustment.

Check the deadline shown in your communication and monitor the portal promptly. Do not wait until the last day: portal access, verification or document-upload problems can take time to resolve. Keep a copy of the communication and note its issue date and response deadline.

If you do not respond within the allowed period, the CPC may proceed with the proposed adjustment. This can affect your taxable income, tax payable or refund. If you see the communication late, check immediately whether the response option is still available and follow the portal’s instructions.

How to respond online

The usual e-Filing portal process is:

1. Log in to the Income Tax e-Filing portal using the taxpayer’s account.
2. Open Pending Actions and select e-Proceedings.
3. Find the proposed adjustment communication for Section 143(1)(a) or Section 270(1)(a), then view or download it.
4. Review each proposed adjustment and the information shown beside it.
5. For each item, select whether you agree or disagree. Explain any disagreement as requested.
6. Review and submit your response. Save the transaction ID or acknowledgement.
7. Check e-Proceedings later for your submitted response and any further communication.

There may be more than one adjustment. Respond to each separately rather than giving a general statement such as “I disagree with the notice.” The portal’s options may change, so follow the wording displayed in your account.

What to check before choosing “Agree” or “Disagree”

Compare the communication with the exact return you filed. Download the ITR and its acknowledgement, then find the schedule and line connected to the proposal. Check the assessment year or tax year, PAN, income head, amount and tax credit involved.

Compare the return with records relevant to the issue. These may include:

• Form 16, Form 16A or other income statements.
• Form 26AS, AIS or TIS information.
• Interest, dividend or investment statements.
• Deduction certificates and payment receipts.
• A tax audit report or business-income schedules.
• An earlier-year return or loss schedule.
• Your tax computation and proof of tax payments.

A tax credit mismatch may occur if a deductor has not filed or corrected its statement. If your records support the credit, explain the discrepancy and retain the evidence. Do not claim a credit that does not belong to you or relates to another year.

Keep your response focused. State what the notice proposes, whether you agree and why. Identify the relevant return schedule and provide supporting information or documents where the portal allows it. Avoid including unrelated documents or unsupported claims.

Examples

A deduction is shown as unavailable because the return was late. Check the filing date and the rule for that deduction. If the date or eligibility information in the proposal is wrong, explain the error and provide the relevant acknowledgement or evidence. If the return was late and the deduction is not available in that situation, agreeing may be appropriate.

TDS credit is missing. The communication says the credit is unavailable, but your return claims it. Compare the TDS amount and PAN in the return with Form 16 and your tax-credit information. If your employer reported the deduction incorrectly, contact the employer to correct its filing as well as responding to the communication. Your response alone may not fix the underlying record.

A calculation appears wrong. Recalculate the figures in the relevant schedule. If the return itself contains the error, check whether a revised return is still legally available and respond to the proposed adjustment within its deadline.

Response, revised return or rectification?

These are different steps. A response tells the Department whether you agree with a proposed adjustment before processing. A revised return corrects information in a return, if the law’s time limit and conditions allow it. Sending a response does not automatically revise your return.

After your return has been processed and an intimation issued, the pre-processing response stage is generally over. If the intimation contains a mistake apparent from the record, a rectification request may be available under Section 154 of the 1961 Act or Section 284 of the 2025 Act, as applicable. The Department’s portal guidance distinguishes a response to a proposed adjustment from rectification after processing.

A proposed adjustment is also different from:

• A defective return notice under Section 139(9), which asks you to correct a defect.
• A scrutiny notice, which begins a separate assessment process.
• An intimation after processing that shows a refund or tax payable.
• A notice proposing to adjust a refund against an outstanding demand.

For help understanding a defective return notice, see TaxClear’s Section 139(9) response guide. For the later processing stage, see its guide to an ITR processed message and Section 143(1) intimation.

There is generally no appeal against a proposed adjustment at this stage; respond through e-Proceedings. If a later intimation or order makes an adjustment that you dispute, review the applicable rectification or appeal options and their deadlines.

FAQs

Is a proposed adjustment notice a tax demand?

No. It is a communication about a proposed change before processing. A refund or amount payable may appear in a later processing intimation.

How long do I have to respond?

The stated period is generally 30 days from the issue date under Section 143(1)(a). Section 270(1)(a) also provides a 30-day response period. Check your communication and portal.

Can I disagree with only one proposed adjustment?

Yes. Review and respond to each adjustment separately using the agree/disagree options in e-Proceedings.

Can I file rectification before the return is processed?

The Department’s guidance says to respond to the proposed adjustment at this stage. Rectification is generally considered after processing, if the intimation contains a mistake apparent from the record.

Does the 2025 Act apply to an AY 2026–27 return?

A return for FY 2025–26 is filed as AY 2026–27 under the 1961 Act. The 2025 Act applies to tax years beginning on or after 1 April 2026. Check the period covered by your return and the section shown on your communication.

For the return-filing process and portal steps, see TaxClear’s online ITR filing guide for AY 2026–27.