Income Tax — New Act 2025

E-Proceedings Evidence Checklist Under Income-tax Act 2025: Calculator-Friendly Guide with Worked Examples

By Finin2min Research Desk High Priority Updated June 2026 Faceless Assessment Guide

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.

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How 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 144B (new Act) issued via portal 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)

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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 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) 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	Form 26QB / TDS certificate (Form 16B); 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 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

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.

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).

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.

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.

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.

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 144B
Processing Intimation	143(1)	Section 144(1) / CPC processing
Best Judgment Assessment	144	Section 144(3)
Reopening of Assessment	148 / 148A	Section 150 / 150A
Rectification	154	Section 292
Penalty	271(1)(c)	Section 436 / 437
Withholding of refund	241A	Section 245B
Refund adjustment	245	Section 245A

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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)

🧮 Tax Calculator 📈 Capital Gains Calc ⚖️ Old vs New Regime

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.

Sources: Income-tax Act 2025 (Section 144B, Section 292, Section 245A, Section 150); CBDT Guidelines on Faceless Assessment 2021 and extensions under new Act; NFAC Standard Operating Procedure; incometaxindia.gov.in e-Proceedings module documentation 2026.

Disclaimer: This article is for educational purposes only. It is not a substitute for professional tax advice. Each e-proceedings case is fact-specific. Consult a qualified Chartered Accountant or tax advocate for your assessment response. Finin2min is not liable for reliance on this content.