NRI Income Tax Notices In India Under section 142(1), 133(6), 143(2), 144

In recent years, NRIs living abroad have been receiving income tax notices under sections 142(1), 133(6), 148, 143(2), etc. This is happening due to high-end digital monitoring, mismatches in income reporting, undisclosed foreign income, discrepancies in bank statements, and so on.

Getting these notices has raised common concerns among NRIs about what steps to take, how to respond appropriately, and what proactive measures they must take.

In this blog, we will understand why NRIs are receiving more income tax notices, why a notice is issued under a particular section, and what actions are required to address them.

Why NRIs Are Receiving More Income Tax Notices

Receiving income tax notices is a result of several small, overlooked mistakes that NRIs make. This includes underreported income, incorrect TDS credits, mismatches between NRI filed returns and their Form 26AS, and the list is endless.

NRIs sometimes overlook compliance requirements which can become significant during formal tax scrutiny. The Indian Income Tax Department has increasingly adopted data analytics and automated monitoring systems for asset tracking and tax assessments, which is why even minor inconsistencies may get flagged.

Additionally, NRIs are more frequently selected for verification due to cross-border transactions, CRS/FATCA data sharing, changes in residential status, and possible reporting mismatches. In recent years, Indian taxation authorities have strengthened technology-driven monitoring, making accurate and transparent tax reporting increasingly important.

Notice Issued Under Section 142(1): Inquiry Before Assessment

A notice under Section 142(1) is issued by the Assessing Officer (AO) to request additional documentation or information necessary for assessment or to require filing of a return where it has not been filed.

Documents such as income bank statements, TDS certificates, proof of foreign income, and so on are asked for.

NRIs should note that a notice under Section 142(1) may be issued either to require filing of a return or to seek additional information even after filing. Such notices are generally issued before completion of the assessment proceedings, and timelines may vary depending on the case.

Notice Issued Under Section 133(6) – Seeking Information

An income tax notice under Section 133(6) is typically issued for reasons such as:

Verification of financial transactions: To ensure that high-value transactions have been accurately reported in the ITR.

Monitoring legal compliance: To verify whether applicable tax laws have been properly followed.

If discrepancies are suspected or additional information is required, the department may issue such notices.

Additionally, this section empowers the Assessing Officer to request information from banks, financial institutions, or other relevant entities.

Notice Issued Under Section 143(2): Scrutiny Assessment

For NRIs, a notice under Section 143(2) means the income tax return has been selected for detailed scrutiny. The purpose is to verify the accuracy, authenticity, deductions claimed, and income disclosures made in the return.

This scrutiny helps confirm that income has not been underreported or losses overstated.

Notice Issued Under Section 144: Best Judgment Assessment

A notice or order under Section 144 arises when the taxpayer fails to file returns, comply with notices, or provide required documents.

Under such circumstances, the Assessing Officer completes the assessment based on available information and reasonable judgment rather than taxpayer submissions.

This may result in higher tax liabilities since deductions or exemptions may not be fully considered. Appeals against such orders can be time-consuming and costly.

Notice Issued Under Section 148: Income Escaping Assessment

A notice under Section 148 is issued when the Assessing Officer believes income chargeable to tax has escaped assessment. Under the current reassessment framework, this is generally preceded by procedures under Section 148A, where preliminary inquiry or opportunity of being heard may be provided before issuing the notice.

Such reassessment notices are serious and must be responded to within the specified time.

Notice Issued Under 131(1A): The Powers Of Investigation

A notice under Section 131(1A) may be issued when the department suspects possible income concealment or requires investigation before or during assessment proceedings.

This section grants investigative powers similar to those of a civil court, including discovery, inspection, enforcing attendance, and examination of documents.

The Bottom Line

Many NRIs initially assume an income tax notice is routine communication, but non-response can escalate matters. For example, ignoring information requests may lead to scrutiny proceedings, and non-compliance with assessment notices may result in best judgment assessments.

In simple terms, maintaining transparency, timely compliance, and accurate reporting helps avoid unnecessary stress later.

For NRIs seeking professional assistance in filing income tax returns, Savetaxs provides specialized support. We have assisted NRIs across 90+ countries with tax compliance and notice handling. Our experts understand why such notices are issued and how to resolve them in accordance with Indian tax laws.

We Help You With

• Accurate determination of residential status under section 6 of the Income Tax Act. 
• Assistance on drafting a professional reply with reference to CBDT and PIB clarifications. 
• We provide expert help in handling notices under section 142(1), Section 133(6), Section 148, Section 143(2), Section 131(1A). 
• Assistance with documents such as employment permits, documentation, NRO/NRE bank details, and DTAA claims. 
• End-to-end support for both NRI Income tax compliance and cross border fiancial tax planning. 

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