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If India’s Income Tax Department questions cash deposits in your bank account, do not ignore the communication or assume that one standard deadline applies. First authenticate the notice on the official e-Filing portal, identify its section and due date, then answer each deposit with a factual, document-backed explanation through the channel specified for that notice.
A notice seeking information is not automatically a final assessment or a finding that the money is taxable. Its legal effect, deadline and possible consequences depend on the document, the relevant tax year and your facts. The steps below help you respond accurately without guessing what the department will ultimately decide.
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Start with the actual notice, not the message that alerted you
Use the Income Tax e-Filing portal by entering its address yourself or using a trusted bookmark. Do not rely on an unverified email or text-message link. After signing in, go to Pending Actions > e-Proceedings, where supported notices can be viewed and downloaded.
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- your PAN and the taxpayer name;
- the assessment or tax year;
- the issuing authority and notice identification details, including the DIN where shown;
- the provision or section cited;
- the deposit dates, amounts, bank account or transaction referred to;
- the precise questions and documents requested;
- the response due date displayed in the notice or portal; and
- the response channel and any attachment instructions.
Keep the downloaded notice unchanged. The wording matters: a request for clarification, a proposed adjustment and a statutory show-cause communication do not necessarily have the same response process.
What an unexplained-deposit notice is asking you to establish
The department may have received information about a cash deposit from reporting by a bank or another source, or may be checking whether the deposit is consistent with the income and transactions reported in your return. The notice normally requires you to connect each questioned credit to its real source and timing.
Read every line for the tax year, deposit date, amount, account number and information already held by the department. Compare those details with your bank statement and books. A mismatch in date or amount should be addressed directly rather than silently ignored.
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The notice itself, not a general internet description of “cash-deposit notices,” determines what you must provide. The material reviewed for this subject does not establish a universal legal test, proof list, tax rate, penalty or appeal route for every case. Those outcomes depend on the notice, the applicable law and the underlying facts.
Understand the statutory labels without assuming the result
India’s official 2026 income-tax return form schedule lists cash credits under section 68, unexplained money and similar items under section 69A, and an associated income category under section 115BBE. A notice may use one of these labels, but the label alone does not prove that your deposit is unexplained or determine the eventual tax treatment.
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Department help pages refer to both the Income-tax Act, 1961 and the Income-tax Act, 2025 in procedural contexts. Check which Act, section numbering, commencement rules and tax year apply to your document. Do not copy a section number or consequence from an older notice or a generic article.
Choose the response route that matches your notice
Most registered-user responses are handled in e-Proceedings, but the portal also has a narrower pre-login route. Use the route identified by the notice and the portal, not the route that appears most convenient.
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A free scan shows the junk files, broken settings and background clutter dragging Windows down - then fixes them in one click.Free scan · Windows 10 & 11| Route | When it is used | What you can do | Important limits |
|---|---|---|---|
| e-Proceedings | Supported notices and communications linked to your e-Filing account | View or download the notice, submit a written response and upload electronic attachments; an authorised representative can respond where the service permits it | The portal’s displayed due date and instructions control; a submitted response cannot be edited or withdrawn |
| Pre-login “Comply to Notice” | Specified ITBA documents not linked to a PAN or TAN and certain notices under section 133(6) | Submit a response after entering the complete DIN and attach files where the service allows | The department says this route does not provide an authorised-representative option or an adjournment request |
The department describes “Comply to Notice” as a pre-login functionality for responding to specified notices. Its limited scope means you should not assume it is the correct route for an ordinary PAN-linked e-Proceedings communication.
Build a deposit-by-deposit reconciliation
A clear reconciliation is usually more persuasive than a broad statement that your cash was “legitimate.” Create one line for every deposit questioned. Use the notice and your bank statement as the starting records.
| Deposit date and amount | Actual source | Supporting record | Explanation or gap |
|---|---|---|---|
| Copy the date and amount shown in the notice or bank statement | Describe what actually happened, such as redeposit of a prior withdrawal, sale proceeds, business receipts, a gift or an inheritance | Name the record you are attaching and explain how it proves the source and timing | Explain any difference in dates, amounts or account references; identify records that genuinely cannot be obtained |
Reconcile totals as well as individual entries. If several withdrawals were accumulated before one deposit, show the sequence and avoid claiming that one withdrawal alone funded the entire amount. If a deposit combines business and personal cash, separate the components and explain the accounting treatment.
Cash previously withdrawn from a bank account
Attach the relevant bank statement pages or withdrawal records and identify the earlier withdrawal date, amount and account. Explain why the cash was retained and later deposited. The records should make the movement of money understandable; a withdrawal entry by itself may not explain a substantially different amount or a long unexplained interval.
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Use the sale agreement, receipt, settlement record or other document that reflects the buyer, seller, date and consideration. Match the proceeds to the deposit and explain deductions or instalments. Do not describe a transaction as a sale if the document does not support that characterization.
Business receipts
Provide the books, invoices, cash summaries, sales records and bank entries that cover the relevant period, to the extent they exist and are responsive to the notice. Explain how the deposit was recorded in the business accounts and how it relates to the income reported for that tax year.
Gift, inheritance or money received from another person
Identify the person who provided the money, the relationship and the date and mode of transfer. Gift documentation, inheritance papers, bank records or a written confirmation may be relevant depending on the facts. The documents must describe the real transaction; do not create or backdate a declaration merely to fit the notice.
Agricultural or other cash-generating activity
Use the records that genuinely exist for the activity, such as sale receipts, crop or production records, land or lease documents and corresponding bank entries. Explain the period in which the income arose and how the cash was accumulated before deposit.
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These are practical examples, not a government-mandated checklist for every taxpayer. The department’s procedural material confirms that electronic attachments can be submitted, but it does not prescribe one universal set of evidence for all unexplained-cash cases.
Write the response in the order of the notice
Use a short covering response followed by a numbered answer to each question. A useful structure is:
- Identify the proceeding. State the notice reference, tax year and date.
- Answer each item. For every deposit, state the true source, date, amount and account.
- Cross-reference evidence. Label attachments consistently and explain the link between each record and the deposit.
- Address discrepancies. If the notice has a different amount, date or account, explain the difference and provide the record that resolves it.
- State limits honestly. If a document is unavailable, say so and describe what alternative evidence you are providing or what steps you have taken to obtain it.
Write only what you can support. Do not guess, use a convenient source that did not occur, alter a record, or submit a document that is unrelated to the questioned transaction. If your explanation is mixed, uncertain or potentially inconsistent with an earlier return, obtain professional advice before filing.
Submit carefully through e-Proceedings
In e-Proceedings, open the relevant notice, select the response option and upload the written explanation and supporting files requested by the screen. Follow the file types, size limits and naming instructions displayed at submission; the reviewed official material does not establish one permanent limit for every proceeding.
Review the complete response before selecting submit. The Income Tax Department’s e-Proceedings FAQ states: No, you cannot edit your response once submitted on the e-Filing portal.
After submission, save the final text, every uploaded attachment, the acknowledgment or transaction ID and a screenshot or downloaded copy showing the portal status. Keep the same records with your bank statements and working reconciliation.
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Do not apply the section 143(1)(a) deadline to every notice
The department’s section 143(1)(a) manual describes a proposed adjustment for discrepancies in return data and gives a 30-day response period for that particular notice type. That 30-day period is not a general deadline for an unexplained-cash-deposit inquiry.
Use the due date in your own notice and the date shown in the portal. If the portal and a general help page appear inconsistent, preserve a copy of both and seek clarification promptly through the department’s official support route or a tax professional. A request for more time, where available, must be made through the facility provided for that proceeding; the pre-login Comply to Notice route does not provide an adjournment request.
What to do if you cannot prove the entire amount immediately
File a truthful, organised response by the applicable deadline rather than waiting until every historical record is perfect. Separate supported deposits from entries for which evidence is still being located. Explain the search being made, identify alternative records and avoid presenting an estimate as a proven fact.
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If several years, accounts or notices are involved, create a separate reconciliation for each proceeding and tax year. Do not attach a large undifferentiated file bundle; an index and clear labels help the reviewing officer connect documents to individual deposits.
When professional help is warranted
A qualified Indian chartered accountant or tax lawyer can review the notice, reconcile records and check whether your explanation is consistent with the applicable Act and tax year. Professional review is particularly sensible when:
- the amount is significant relative to your disclosed income or assets;
- the source is disputed, mixed or partly undocumented;
- the notice covers more than one year, account or proceeding;
- the department refers to sections 68, 69A, 115BBE or another provision whose application you do not understand;
- you previously filed a different explanation or return position; or
- the deadline is close and the evidence needs to be assembled quickly.
Where the portal service permits it, an authorised representative can respond through e-Proceedings. Confirm the representative’s authority and make sure you retain copies of everything submitted in your name.
Quick Recap
Common mistakes that make a response weaker
- Ignoring the portal notice: an email alert is not a substitute for reading the document and recording its due date.
- Using a generic explanation: “savings” or “business income” without a deposit-by-deposit trail does not answer a specific query.
- Confusing withdrawal and deposit dates: show the full sequence and account rather than assuming the officer will infer it.
- Uploading unsupported papers: irrelevant or altered documents can create credibility problems.
- Assuming a notice is a final demand: first determine whether it seeks information, proposes an adjustment or starts another statutory process.
- Submitting without a copy: e-Proceedings responses cannot be edited or withdrawn, so preserve the exact filing and acknowledgment.
- Using the wrong channel: the restricted pre-login facility is not a universal alternative to PAN-linked e-Proceedings.
A practical decision sequence
- Authenticate the notice in the e-Filing portal and download it.
- Record the issuing authority, tax year, section, deposits, questions, channel and due date.
- Match every questioned deposit to its real source using bank statements and source-specific records.
- Draft numbered answers that point to clearly labelled attachments.
- Have a professional review the response when the facts, amount or legal provisions make the case high-risk.
- Submit through the route shown for that notice, then preserve the response, attachments, transaction ID and portal status.
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