header main logo header main logo

The below content is purely for informational purposes and is not intended to constitute advisory of any kind. Please note, these are in-depth articles which are best viewed on large screen devices like laptops, desktops and tablets. The position reflected in this article has been updated as of November 15, 2025.

 

Even while living abroad, most Non-Resident Indians (NRIs) maintain strong financial ties with in India. with as global data-sharing frameworks like the Common Reporting Standard (CRS), Foreign Account Tax Compliance Act (FATCA) and Double Taxation Avoidance Agreements (DTAAs). come into play, these ties are the Indian Income Tax Department has brought these ties under scrutiny.

 

Common scenarios where NRIs receive tax notices

The Income Tax Department has comprehensive information on your assets in India and abroad. This information is mapped against your Permanent Account Number (PAN) and any Income Tax Return (ITR) filed in India. If any discrepancies are found, the department may issue notices.

 

  • Non-filing of ITR

     

    If you earn Indian-sourced income such as rent, capital gains, or interest above the basic exemption limit or engage in specified financial transactions, filing an ITR in India is mandatory. Missing it could trigger a notice.

     

  • Mismatch of information

     

    If your filed ITR does not align with the information in your AIS or Form 26AS, the system flags it automatically and this automatic flagging can further lead to the issuance of a notice from the Income Tax Department seeking clarification.

     

  • High-value transactions

     

    Large financial activities like property deals, mutual fund redemptions, hefty, fixed deposits or substantial foreign remittances can prompt scrutiny, especially if not adequately reported.

Did you Know ALt text

Did you know?

Every notice, order, or communication issued by the Income Tax Department must contain a Document Identification Number (DIN). It is a unique computer-generated number that helps ensure transparency and authenticity in all tax-related correspondence.

 

Measures to keep in mind for potential tax notices

Most notices can be avoided with mindful reconciliation and cautious reporting.

 

  • Reconcile with your AIS

    The AIS is a comprehensive record of your financial transactions in India, compiled from information provided by banks, financial institutions and government agencies. It includes transactions related to savings and fixed deposit interest, rent, dividends, immovable property dealings, share and mutual fund investments, Tax Deducted at Source (TDS)/Tax Collected at Source (TCS), etc

     

    Mismatches between your ITR and AIS are among the most common reasons for tax notices. Here’s what you can do:

     

    1. Download your AIS from the “Services” tab on the Income Tax e-filing portal
    2. Review all entries carefully. If you spot mismatches or errors, submit feedback via the AIS portal
    3. Ensure your ITR disclosures align with AIS data before filing

  • File your ITR accurately and completely
    1. Disclose all relevant income and assets, including those under the Asset and Liability Schedule (if applicable)
    2. If you are claiming DTAA benefits, obtain and submit a valid Tax Residency Certificate (TRC)
    3. Even if your income is below the taxable threshold, filing an ITR is advisable if you have undertaken prescribed transactions in India
    4. Consider seeking professional assistance, especially if your income situation is complex

Conclusion

Navigating tax notice can feel daunting especially for NRIs unfamiliar with the intricacies of Indian tax law. But most notices arise from data mismatches, not misconduct. With timely action and expert guidance, resolution is often straightforward. Always verify the notice, understand its intent, and respond within the stipulated timeline. Regular consultation with a tax advisor ensures compliance, peace of mind, and confidence in your financial disclosures.

Frequently Asked Questions (FAQs)

I live outside India and received a tax notice. Do I need to travel to India to respond?

In most cases, notices can be handled online through the Income Tax portal. However, non-resident assessments are often handled by the Jurisdictional Assessment Wing, where the Assessing Officer (AO) may require physical hearings. In such cases, you can authorise a qualified representative—such as a Chartered Accountant or tax advisor in India—to attend the hearing and represent your case on your behalf. Personal appearance is generally not required unless specifically called for by the AO.

I haven’t filed an Income Tax Return in India for the past few years. Could that be a reason for receiving a notice?

Yes. If you had income from sources in India such as rent, interest, or capital gains or carried out certain financial transactions, you may be required to file an Income Tax Return. Non-filing in such cases can lead to a tax notice. It's a good idea to consult with a tax expert to assess your situation.

How can I check if the tax notice I received is genuine?

All official communication from the Income Tax Department includes a Document Identification Number (DIN). You can verify this number using the “Authenticate Notice” feature on the Income Tax e-filing portal to confirm if the notice is valid here: https://eportal.incometax.gov.in/iec/foservices/#/pre-login/authenticate-notice-issued-by-itd

What if I don’t respond to a tax notice on time?

Failure to respond within the prescribed timeline can lead to:

  • Penalties
  • Best judgement (ex parte) assessment
  • Increased scrutiny
  • In serious cases, it could even result in prosecution. 

To avoid this, make sure you respond within the timeline mentioned in the notice. If you’re unsure how to reply, it’s best to consult a professional.

What is the difference between AIS and Form 26AS?

Both are tools to help you report your income accurately.

  • AIS (Annual Information Statement) gives a broader picture of your financial activity in India, including property sales, dividends, and interest income.
  • Form 26AS shows details of tax deducted, tax collected, and advance taxes paid.
  • Reviewing both before filing your return can help prevent mismatches.

If I don’t have any tax liability, should I still file a return to avoid notices?

Filing a return even if you don’t owe any tax can be helpful. It creates a clear record, supports visa or loan applications, and may reduce the chances of receiving a notice if you’ve had high-value transactions in India. It’s a simple step that can provide peace of mind.

How can I verify if an Income Tax notice or order I received is genuine?

To verify the authenticity of a notice or order, visit the Income Tax portal, Navigate to the 'Authenticate Notice/Order issued by ITD' section under the 'Quick Links' tab, Enter the Document Identification Number (DIN) mentioned in the notice to confirm its legitimacy.

Disclaimer:

The contents of this article/infographic are meant solely for informational purposes. The contents are generic in nature and are not intended to serve as a substitute for specific advice on any matter whatsoever. The information is subject to updation, completion and verification and the applicable norms may keep changing materially from time to time. This information is also not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to applicable laws or would subject ICICI Bank Limited/its affiliates to any licensing or registration requirements. ICICI Bank Limited/its affiliates and their representatives shall not be liable for any direct or indirect losses or liability incurred arising in connection with any decision taken by any person on the basis of this content. Please conduct your own due diligence and consult your financial advisor before making any decision. Terms and conditions of ICICI Bank and third parties apply. ICICI Bank is not responsible for third party services. Nothing contained herein shall constitute or be deemed to constitute an advice, invitation or solicitation to avail any products/ services of third parties.

Disclaimer

PROCEED