How to Configure SMTP for Incoming and Outgoing Email in Sharepoint

Goto Administrative Tools->Server Manager

1.     Verify that you have the following administrative credentials: You must be a member of the Administrators group on the local computer

2.     Click Start, point to Administrative Tools, and then click Server Manager.

3.     In Server Manager, click Features.

4.     In Features Summary, click Add Features to open the Add Features Wizard.

5.     On the Select Features page, select SMTP Server.

6.     In the Add Features Wizard dialog box, click Add Required Features, and then click Next.

7.     On the Confirm Installation Selections page, click Install.

8.     On the Installation Results page, ensure that the installation is complete, and then click Close.

Below screen will appear

To set the SMTP service to start automatically

1.     Click Start, point to Administrative Tools, and then click Services.

2.     In Services, right-click Simple Mail Transfer Protocol (SMTP), and then select Properties.

3.     In the Simple Mail Transfer Protocol (SMTP) Properties dialog box, on the General tab, in the Startup type list, select Automatic.

4.     Click OK.

Configure outgoing e-mail from Central Administrator

1.     Verify that you have the following administrative credentials: You must be a member of the Farm Administrators group on the computer that is running the SharePoint Central Administration Web site.

2.     In Central Administration, click System Settings.

3.     On the System Settings page, in the E-Mail and Text Messages (SMS) section, click Configure outgoing e-mail settings.

4.     On the Outgoing E-Mail Settings page, in the Mail Settings section, type the SMTP server name for outgoing e-mail (for example, mail.example.com) in the Outbound SMTP server box.

5.     In the From address box, type the e-mail address as you want it to be displayed to e-mail recipients.

6.     In the Reply-to address box, type the e-mail address to which you want e-mail recipients to reply.

7.     In the Character set list, select the character set that is appropriate for your language.

8.     Click OK.

Select Yes option radio button for Enable Incoming Email in screenshot above and click ok.

Now finally check for Emails working.