Section 263 of the Income-tax Act, 2025 governs filing of returns, and sub-section (7) deals with defective returns. It replaces Section 139(9) of the 1961 Act. The conditions for treating a return as defective are now set out in Rule 166 of the Income-tax Rules, 2026.
Income Tax, Income-tax Act 2025, across India
Income-tax Act, 2025
This page is for notices and orders under the Income-tax Act, 2025. If yours names the Income-tax Act, 1961, see Defective Return u/s 139(9) (1961 Act). Not sure which Act applies? The heading of the notice names it, or call us.
What this notice means
If the defect is not removed within the time allowed, the return can be treated as invalid, as if it had not been filed. That can affect carry forward of losses, refunds and interest. The communication gives an error description, and the response is filed online.
Common reasons it is issued
- Tax credit claimed without the matching income
- Books of account required but balance sheet and profit and loss details not filled
- Audit report required but not furnished before the return
- Wrong return form used
Time limit to respond
Documents to keep ready
- The defect communication
- The return as filed and the computation
- TDS certificates and the annual information statement
- Audit report, if applicable
How we handle it
- Read the error code and confirm whether the defect is genuine
- Correct the return and upload it in response, or explain why the return is not defective
- Check that the corrected return is accepted and processed
Points to note
- Do not ignore the communication. An invalid return can cost losses and refunds
- Correct only the defect pointed out, and keep the rest consistent
- For returns of assessment year 2026-27 and earlier, the notice cites Section 139(9)
What usually comes next
- Intimation and Proposed Adjustment under Section 270(1) of the Income-tax Act, 2025Processing of the corrected return
- Rectification of Mistake under Section 287 of the Income-tax Act, 2025Correcting mistakes in the intimation
Frequently asked questions
What is Rule 166?
Rule 166 of the Income-tax Rules, 2026 lists the conditions under which a return is treated as defective under Section 263(7).
Can I disagree with the defect?
Yes. The response allows you to say the return is not defective and give reasons.
Official sources
- Authenticate a notice (DIN check)incometax.gov.inConfirm that a notice or order is genuine before replying
- Income Tax e-Filing portalincometax.gov.inReply to notices under e-Proceedings and file first appeals
- Income Tax Departmentincometaxindia.gov.inActs, rules, circulars and the 1961 to 2025 section utility
Received a notice or an order?
Call us to talk it through. Keep the notice and its response date handy.