DRC-01A: the pre-notice intimation

What a DRC-01A is

Before issuing a show cause notice for a tax demand, the officer can first communicate the tax, interest and penalty they have worked out. They do this in Part A of Form DRC-01A. You are then given the chance to respond.

Nothing is decided at this stage. But if you ignore it, the next document you receive is likely to be a formal show cause notice (DRC-01).

Your three options

• Agree and pay in full. Pay the amount through Form DRC-03 and report the payment in Part B. Where tax is paid before a show cause notice is issued, the law provides that no notice is issued for the amount paid.
• Agree in part. Pay what you accept and explain the rest in Part B.
• Disagree. Explain in Part B, with documents, why nothing or less is payable.

Step by step: how to reply

1. Open the intimation on the portal and note the period, the section, the amounts and the reply date.
2. Reconcile the department's figures with your returns and books. Find out where the difference comes from.
3. Decide, line by line, what you accept and what you dispute.
4. If you pay, work out the interest as well, pay through DRC-03 and keep the challan.
5. File Part B with your explanation and attachments before the date, and save the acknowledgement.

What to attach

• A reconciliation showing how your figures differ from the officer's.
• Invoices, credit notes, ledgers and bank proof for the disputed items.
• The DRC-03 challan, if you paid something.

What happens next

If you paid in full and the officer is satisfied, they acknowledge the payment in DRC-04 and the matter ends. If they are not satisfied, or you did not reply, a show cause notice in DRC-01 follows, and you reply to that in DRC-06. Read our guide on the show cause notice if one arrives.

Common mistakes

• Treating a DRC-01A as spam because it is not a notice.
• Paying without checking the officer's calculation.
• Paying the tax but forgetting the interest.
• Replying with arguments but no documents.