Receiving a notice from the Income Tax Department can be unsettling, especially if you are unsure what documents you need to provide. A Section 142(1) notice usually means the department needs more details from you, either because you missed filing your return or because some entries in your return need clarification.
The good news is that the notice will clearly mention what they are asking for. But understanding and preparing the right documents is still your responsibility. Whether it is income proofs, deduction receipts, or crypto trading records, keeping everything in order will make your response smooth and accurate. In this guide, we will walk you through the documents typically required based on the reason your notice was issued.
Documents Needed If You Have Not Filled your ITR
If your Section 142(1) notice was sent because you did not file your return, you will need to prepare the full set of documents required for regular ITR filing. Here is what to include.
Income Proof and TDS Details
To start, gather all documents that show how much income you earned during the relevant financial year. This includes Form 16 from your employer, Form 16A if you received income from other sources, and Form 26AS, which summarises your TDS. These forms help verify your declared income and ensure there are no mismatches with official records.
Bank Details and AIS Data
Bank account statements for the full financial year are essential. They help confirm salary credits, investment income, and high-value transactions. You should also download your Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) from the income tax portal to cross-check what the department already knows about your financial activity.
Investment and Deduction Proofs
If you want to claim deductions under sections like 80C or 80D, you need to submit the relevant proofs. This can include life insurance receipts, PPF passbooks, ELSS statements, or medical insurance premium payments. Submitting these documents ensures that your eligible deductions are not denied during assessment.
Capital Gains and Crypto Trading Records
If you sold shares, property, or crypto assets, capital gains statements are essential. Collect:
- Broker-generated capital gains summary
- Sale and purchase invoices for property or shares
- Crypto transaction history across all wallets and exchanges
Make sure every gain or loss is supported by proper records. Incomplete data could lead to rejection of your claims or further notices.
Documents Requested for Verification of a Filed Return
Sometimes, even after filing your return, the Assessing Officer may want to verify certain entries. If your Section 142(1) notice lists specific items, make sure to submit only what is asked for.
Supporting Evidence for Deductions
You may be asked to provide proof for deductions claimed under various sections of the Income-tax Act. This can include:
- Life insurance or PPF statements for Section 80C
- Health insurance receipts for Section 80D
- Rent receipts for claiming House Rent Allowance (HRA)
- Donation receipts for Section 80G
These documents help the department verify that your deduction claims are valid and supported by actual payments.
Business Invoices and Professional Receipts
If you run a business or work as a freelancer, the officer might ask for invoices and receipts related to your income. Submit:
- Sales invoices
- Client payment proofs
- GST returns (if applicable)
- Expense receipts
These records allow the officer to confirm your declared income and assess any allowable expenses accurately.
Loan and EMI Statements
You may need to submit loan-related documents if you claimed deductions for interest payments or principal repayments. These typically include:
- Home loan interest certificates
- Bank EMI schedules
- Education loan repayment proofs
These help justify your deduction claims and support the amounts reported in your return.
Property Valuation and High-Value Asset Reports
For property transactions or asset declarations, the officer may ask for:
- Registered sale or purchase agreements
- Property valuation certificates
- Details of gold, vehicles, or other significant assets
These documents help confirm the accuracy of income declared from capital gains or assets held.
Crypto Transaction Summaries and Reports
If you are engaged in crypto trading or investment, submit detailed records of your activities. Include:
- Exchange-wise transaction history
- Wallet transfer logs
- Capital gains or loss summaries from crypto platforms
- Fiat conversion rates for each trade
The Income Tax Department treats virtual digital assets seriously. Clear documentation ensures your crypto disclosures are accepted without objection.
Documents Required in Case of High-Value or Unusual Transactions
If the notice was issued because of large or suspicious transactions, you must provide clear documentation to justify their source and purpose. These transactions often trigger automated alerts in the department’s system.
Source of Funds Proofs
You must prove the origin of any large deposit, investment, or transfer. Acceptable documents include:
- Gift deeds with donor’s PAN and relationship
- Registered wills or inheritance documents
- Loan agreements with repayment schedules
- Salary revision or bonus letters from employers
Each document should show how the funds were received and why they match your financial records.
Sale or Purchase Agreements
For asset sales or purchases, especially those involving property, you must provide:
- Registered sale/purchase deeds
- Payment proofs such as bank transfers or demand drafts
- PAN details of buyer or seller
- Stamp duty and registration fee receipts
These documents help establish the legality and scale of the transaction and support any capital gains declared.
Statement of Assets and Liabilities
Sometimes, the officer may ask for your complete financial position as of a specific date. Your statement should include:
- All immovable properties with current market values
- Fixed deposits, mutual funds, and shareholdings
- Outstanding loans or liabilities
- Cash in hand and bank balances
Submit this in a structured format, and make sure it aligns with your income and investments shown in your return.
Crypto-Linked High-Value Transactions
If the notice was triggered by flagged crypto transactions, you will need:
- Wallet addresses and ownership proofs
- Exchange reports showing inflows and outflows
- Value of each crypto trade in INR on the date of transaction
- Bank entries showing conversion of crypto to fiat
This information helps confirm the source and legality of high-value crypto trades, especially if they were frequent or sudden.
General Documents You Should Always Keep Ready
Apart from documents specific to your case, there are a few essentials you should always keep prepared. These help you respond quickly and accurately to any notice issued under Section 142(1).
Copy of the Section 142(1) Notice
Always save a clear digital and printed copy of the notice you receive. It contains important information such as the reason for inquiry, specific document requests, and the deadline to respond. Having this document on hand helps ensure that your response is complete and aligned with the officer’s expectations.
PAN and Aadhaar Details
These two identity documents are necessary for validation of your tax records. Ensure that the details match across your bank accounts, income tax portal, and investment platforms. If there are any mismatches in your PAN or Aadhaar during e-filing or document submission, it may delay the assessment or cause further issues.
Income Tax Login Credentials
You will need your user ID (usually your PAN) and password to access the Income Tax portal. Keep them handy to avoid login issues or delays. If you forget your password, reset it immediately to avoid missing submission deadlines. Keeping your contact details updated on the portal is also essential.
Original Filed ITR Copy
If the notice is asking for clarifications on your filed return, having a copy of that return is vital. This helps you cross-check what you declared and prepare matching documents. Keep the PDF version and acknowledgement number ready in case you are asked to upload or refer to them.
Updated Contact and Profile Information
Your communication details on the e-filing portal must be correct. This includes your email ID, phone number, and address. An incorrect email could lead to missed notices or follow-up queries. Log in and check your profile regularly to keep it updated.
Final Checklist Before Submitting Your Response To A Section 142(1) Notice
Before you click the final submit button on the Income Tax portal, take a moment to double-check everything. A rushed or incomplete response can lead to further queries, delays, or even penalties. Use the checklist below to make sure your reply to the Section 142(1) notice is complete, accurate, and well-documented.
- Have you included all the documents specifically mentioned in the notice?
- Are all your files clearly named and properly formatted (PDF, Excel, or CSV)?
- Have you provided explanations for any gaps, mismatches, or missing records?
- Is your PAN, Aadhaar, and contact information consistent across all submissions?
- Have you ticked the declaration box and submitted the documents correctly?
- Did you download the acknowledgement receipt after submission?
Taking these steps ensures that your response stands up to scrutiny and keeps the process moving smoothly.
How Can KoinX Help With Section 142(1) Notice?
When responding to a Section 142(1) notice involving crypto transactions, preparing the right documents can be difficult. Tracking trades across wallets and exchanges, matching prices, and calculating gains manually increases the risk of errors. KoinX helps you avoid all that by automating every part of your crypto tax reporting process.
Automated Crypto Tax Calculation
KoinX automatically calculates taxes on your crypto activity by tracking all trades, transfers, and conversions. Whether you traded on one exchange or ten, your reports are compiled in minutes with complete accuracy.
Accurate Generation of Schedule VDA
KoinX creates a fully compliant Schedule VDA report that covers every transaction involving virtual digital assets. This ensures that your crypto trades are reported clearly and completely, making your response stronger and error-free.
Easy Integration with Major Exchanges
KoinX connects with over 800 exchanges and wallets. All your data is fetched and organised without manual entry. This reduces delays, eliminates calculation errors, and ensures that your financial records are ready when needed.
Notice Response Assistance and Legal Backing
KoinX also provides professional support to help you respond to income tax notices. With legal-grade reports and expert guidance, you can reply to Section 142(1) notices confidently and on time, without guesswork or missed documents.
Save time, reduce errors, and respond confidently to crypto-related tax notices. Start using KoinX today and make compliance simple.
Conclusion
Responding to a Section 142(1) notice requires clarity, accuracy, and proper documentation. Whether the notice is for non-filing, verification, or high-value transactions, submitting the right records is key to closing the case smoothly. Keeping your documents in order throughout the year can make the process far easier.
If your records involve crypto transactions, tools like KoinX can simplify everything from tax calculations to report generation. So get started with KoinX today, prepare early, respond on time, and stay compliant to avoid penalties or further notices.
Frequently Asked Questions
Can I Ignore a Section 142(1) Notice If I Have No Taxable Income?
No, you cannot ignore the notice even if you believe you have no taxable income. Once the Income Tax Department issues the notice, responding becomes mandatory. You must file the return or submit the requested documents, regardless of your income status, to avoid penalties or further scrutiny.
How Long Do I Have to Respond to a Section 142(1) Notice?
The deadline is mentioned in the notice itself, typically ranging from 10 to 15 days. It’s important to respond within that timeframe. If you are unable to gather all documents in time, submit a partial response before the deadline and follow up with the remaining documents later.
Do I Need a CA to Respond to a Section 142(1) Notice?
Hiring a Chartered Accountant is not legally required but can be very helpful, especially if your case involves business income, crypto transactions, or high-value assets. A tax professional can ensure your response is accurate, complete, and within the law, reducing the chances of further notices.
Is It Safe to Upload Documents on the Income Tax Portal?
Yes, the income tax e-filing portal is secure and designed to handle sensitive financial information. Always log in using your credentials, use supported file formats, and double-check your uploads. Avoid using public computers or shared internet connections while submitting your documents.
