Income Tax
E-Proceedings Evidence Checklist Under Income-tax Act 2025: Calculator-Friendly Guide with Worked Examples
Reviewed by CA Nikhil Gupta · Last reviewed 26 September 2026
Current-law reference: the section table uses Income-tax Act, 2025 sections 270, 273, 271, 279-281, 287, 439 and 438. For a non-resident property seller, verify the applicable withholding process, rate, certificate and remittance evidence rather than using Forms 26QB/16B, which concern resident sellers. Retain the portal acknowledgement, notice response and supporting electronic record with its submission timestamp.
An income tax scrutiny notice lands in your e-filing inbox. You have 21 days to respond. What do you submit? In a physical assessment, you could walk into the AO's office with a folder of documents and explain face-to-face. In a faceless e-proceedings setup, your documents are everything — the AO sees only what you upload. Under the Income-tax Act 2025, the faceless assessment framework is codified and permanent. This guide is a category-by-category evidence checklist with worked examples for salary earners, business owners, and capital gains taxpayers.
Use the Income Tax CalculatorModel the tax impact alongside this guide.
Open CalculatorHow E-Proceedings Work Under the New Act
The Income-tax Act 2025 formalises the National Faceless Assessment Centre (NFAC) framework. All regular scrutiny assessments (equivalent to old Section 143(3)) are assigned to NFAC. The entire proceeding happens through the e-filing portal:
| Stage | What Happens | Timeline |
|---|---|---|
| Notice issuance | Scrutiny notice under Section 270 (new Act), issued via portal in the faceless mode (Section 273), with specific queries | Typically April–September for prior year |
| Taxpayer response | Upload documents and written submission via e-Proceedings module | 21 days from notice date (extendable) |
| Follow-up queries | NFAC may raise additional questions based on your first response | Within 15 days of NFAC review |
| Show Cause Notice (SCN) | Before making any addition, NFAC must issue SCN stating proposed addition | 14 days response window for SCN |
| Draft Assessment Order | NFAC issues draft order; taxpayer can accept or raise objection | 7 days to file objection |
| Final Order | NFAC issues final assessment order after considering objections | 9 months from end of AY (standard cases) |
Every Document Must Be Self-Explanatory: The assessing officer reviewing your response at NFAC may be in a different city from your normal AO. They have no prior context. Every document you upload must be clearly labelled, cross-referenced to the specific query, and accompanied by a brief written explanation. Raw bank statements without annotation are often insufficient on their own.
Master Evidence Checklist — By Notice Type
Category 1: Salary Income Scrutiny
Common triggers: High HRA claimed, large Section 80C deductions, perquisites mismatch, employer-issued ESOPs.
| Query / Addition Proposed | Documents Required | Supporting Evidence |
|---|---|---|
| HRA exemption claimed | Rent receipts (all months), rent agreement, landlord PAN | Bank statement showing rent payments; if landlord PAN not available, Form 60 from landlord |
| Form 16 vs AIS salary mismatch | Form 16 Part A and B from all employers in the year | Appointment letter / separation letter; salary slips for mismatch months |
| ESOP perquisite addition | Employer's perquisite valuation certificate; Form 124 (earlier Form 12BB) | Exercise date, FMV on exercise date from stock exchange; Form 16 showing perquisite included |
| Leave encashment exemption | Leave encashment certificate from employer; Form 16 computation | HR letter confirming unused leave days and encashment amount |
| Gratuity exemption | Gratuity calculation sheet from employer; years of service certificate | Appointment letter (joining date); retirement/resignation letter (exit date) |
Category 2: Business Income (Proprietorship / Partnership / LLP)
Common triggers: Large cash deposits, high expenses relative to turnover, capital introduction, loan repayments from undisclosed sources.
| Query / Addition Proposed | Documents Required | Supporting Evidence |
|---|---|---|
| Cash sales not verified | Cash book, day book; GST sales data (GSTR-1) | GSTIN portal extract; party-wise ledger for cash sales above ₹2 lakh |
| Capital introduction in balance sheet | Source of capital — bank statement of introducer, gift deed if applicable | ITR of capital introducer for the year; bank statement showing transfer |
| Unexplained loans received | Loan agreement; lender's ITR/bank statement showing capacity | TDS certificate (if TDS deducted on interest); repayment entries in books |
| High commission / professional expense | Invoice from payee; signed contract or service agreement | Payee's PAN, GST registration; evidence of service received (emails, deliverables) |
| Depreciation on fixed assets | Fixed asset register; purchase invoices for assets claimed | Payment proof; if imported asset, Bill of Entry from customs |
| Section 43B(h) (Section 37(2)(g) of the new Act) MSME payment disallowance | MSME registration of each vendor (Udyam certificate) | Payment dates from bank statement vs invoice dates; confirm if paid within 45 days |
Category 3: Capital Gains
Common triggers: Real estate sale, equity capital gains, mutual fund redemptions, unlisted shares.
| Query / Addition Proposed | Capital Gains Type | Documents Required |
|---|---|---|
| Property sale capital gain computation | LTCG on real estate | Sale deed; original purchase deed; indexed cost calculation worksheet; stamp duty paid receipts |
| Section 82 reinvestment exemption claimed | LTCG exemption (new house) | New property registration documents; payment receipts; booking agreement if under construction |
| Equity/mutual fund gains | STCG/LTCG on securities | DEMAT account capital gains statement; broker contract notes for disputed transactions |
| Unlisted shares sale | Unlisted share LTCG/STCG | Share transfer agreement; company's last balance sheet for FMV determination; Form SH-4 |
| NRI property sale — TDS by buyer | LTCG on real estate | Buyer's TDS certificate (Form 131, earlier Form 16A) and TDS return details; lower deduction certificate if obtained; bank FEMA certificate |
Category 4: Income from Other Sources
| Query | Documents Required |
|---|---|
| Dividend income mismatch | Dividend warrants / DEMAT statement; TDS certificate (Form 131, earlier Form 16A, from company/mutual fund) |
| Interest income mismatch | Bank interest certificates from all banks; FD renewal receipts showing accumulated interest |
| Gift received (non-taxable claim) | Gift deed; relationship certificate; donor's ITR/bank statement showing capacity; marriage invitation if occasion-based gift |
| Winnings from lottery / online gaming | Winning certificate; TDS certificate (30% TDS); payment proof from platform |
Case Study: Anil's Capital Gains Scrutiny — From Notice to Nil Addition
Small Business Owner + Equity Investor, Bengaluru — AY 2025-26 Scrutiny
Anil sold a plot of land in Hosur for ₹85 lakh in FY 2024-25. He also had ₹4.2 lakh in equity LTCG from mutual fund redemptions. His ITR showed LTCG of ₹22 lakh on the property (after indexed cost of ₹63 lakh) and ₹2.95 lakh taxable equity LTCG (after ₹1.25 lakh exemption). NFAC scrutiny notice challenged: (a) indexed cost computation and (b) equity LTCG amount vs AIS data showing ₹5.1 lakh as "capital gains."
What he submitted:
- Property: Original 2009 purchase deed (₹18 lakh), CII calculation worksheet (FY 2024-25 CII = 363; FY 2009-10 CII = 148), giving indexed cost of ₹44.15 lakh — not ₹63 lakh as claimed. Anil had made an error in his original ITR. He revised before responding.
- Equity: Full DEMAT capital gains statement from CAMS/KFintech showing fund-wise LTCG. The AIS ₹5.1 lakh included dividend reinvestment (IDCW) which is not a "gain" — he submitted fund account statement showing IDCW entries.
- Submitted revised ITR for the property error; for equity, AIS feedback was filed marking IDCW entries as "not capital gains"
Property LTCG (Corrected)
₹40.85 lakh
Equity LTCG (Correct)
₹2.95 lakh taxable
Response Filed Within
18 days (with extension)
Final Addition by NFAC
Nil (case closed)
Document Preparation Best Practices for Portal Submission
How to Prepare and Submit Your E-Proceedings Response
1
Read the notice carefully. Each e-proceedings notice has specific queries numbered Q1, Q2, Q3. Your response must address each query individually — do not send a single bulk PDF hoping the officer finds the relevant section.
2
Create a written submission PDF. Start with a cover page: taxpayer name, PAN, assessment year, notice reference number, and date of response. Then answer each query in separate numbered paragraphs. Refer to the evidence by exhibit number (Exhibit A, B, C).
3
Compile and label all evidence. Name each PDF file clearly: "Exhibit_A_Form16_FY2025-26.pdf", "Exhibit_B_Property_Sale_Deed.pdf". Compress each file under 5 MB. Total upload limit is 50 MB per document and 200 MB per submission.
4
Upload via e-Proceedings module. Login → e-File → e-Proceedings → View Notices → Respond. Select the correct notice and query type. Upload the written submission as the primary document and each exhibit as a separate attachment.
5
Download and save the acknowledgment. After submission, the portal generates an acknowledgment with a unique submission reference number. Save this PDF. If the case is escalated to appeal, this is your proof that you responded within the stipulated time.
6
Request extension if needed. If you need more time (e.g., awaiting a TDS correction from your employer), apply for extension through e-Proceedings before the deadline. Extensions of 15–30 days are usually granted once for genuine reasons. Do not wait for the deadline to pass.
Section Numbers Quick Reference — Old Act vs New Act
For e-proceedings relating to AY 2026-27 (old Act) filings, these old section numbers will appear in notices. For future Tax Year 2026-27 assessments, the new Act numbers will apply:
| Proceeding Type | Old Act Section | New Act Section |
|---|---|---|
| Scrutiny Assessment | 143(3) | Section 270 |
| Faceless Assessment | 144B | Section 273 |
| Processing Intimation | 143(1) | Section 270 (old 143) / CPC processing |
| Best Judgment Assessment | 144 | Section 271 |
| Reopening of Assessment | 147 / 148 / 148A | Sections 279 / 280 / 281 |
| Rectification | 154 | Section 287 |
| Penalty for under-reporting / misreporting | 270A (271(1)(c) for older years) | Section 439 |
| Withholding of refund | 241A | Section 438 |
| Refund adjustment (set-off) | 245 | Section 438 |
Do Not Submit Irrelevant Documents: A common mistake is uploading large bundles of irrelevant documents hoping the officer will find what they need. This slows down processing and can create new questions. Answer exactly what was asked, with exactly the evidence needed. If the query is about HRA, don't include your fixed deposit certificates — they create more questions.
Universal Pre-Response Checklist (Every E-Proceedings Notice)
- Identify and number each query in the notice (Q1, Q2, etc.)
- Confirm the notice section — is it 143(3) scrutiny or 148 reopening? Different strategy applies
- Cross-check ITR filed vs notice queries — have all income sources been declared?
- Pull Form 26AS and AIS for the relevant assessment year and verify match with notice queries
- Prepare written submission with query-wise answers before compiling documents
- Label every exhibit clearly with exhibit number and brief description
- Compress all PDFs to under 5 MB each; convert all documents to PDF (no JPEGs)
- Request extension if response cannot be completed within the notice timeline
- Save and download the portal acknowledgment immediately after submission
- Set calendar reminder for follow-up queries (usually arrive 15–30 days after your submission)
Frequently Asked Questions
The e-filing portal currently allows up to 50 MB per individual document upload and a total submission size of 200 MB per response. All documents must be in PDF format. Compress scanned pages to under 200 KB per page for faster uploads. Always ensure PDFs are text-searchable (not image-only scans) for faster officer review.
Generally no. All submissions must be made electronically through the e-Proceedings module. The NFAC will not accept physical documents by default. However, for survey cases (Section 133A) or search-related assessments, the AO may request physical submission through a specific order.
The AO can proceed ex-parte — completing the assessment without your inputs based only on available data. This typically results in full addition of disputed amounts. You can appeal the ex-parte order but you lose the assessment-stage opportunity to present documents. Always apply for an extension before the deadline, not after.
"Pending" status on the portal can mean your submission is uploaded but not yet reviewed by NFAC, or that NFAC is processing your documents. This is normal and can take 15–60 days for routine cases. The status will change to "Closed" if no further queries arise, or "Response Required" if follow-up questions are raised. Keep checking weekly. If "Pending" continues beyond 90 days, file a grievance on the e-filing portal under the "Pending Actions" category.
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Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Primary category
- Income Tax
- Official starting point
- www.incometaxindia.gov.in
Page source links
The prior page did not embed a page-specific external source. The category authority above is the minimum verification starting point; a specific instrument should be added when available.
Primary sources & related provisions
Statutory provisions referenced in this guide: