Last Updated on Feb 28, 2022 by Sankeeth Sunny
Filing income tax returns (ITR) can be cumbersome since the details have to be filled in meticulously, with zero error. If you make one single mistake, the tax department is going to hold that as a discrepancy and ask you to revise your ITR in their intimation notice under Section 143(1) of the Income Tax Act.
What is the intimation notice? It is an update that the Income Tax Department’s Centralised Processing Centre sends you after verifying and processing your ITR application. In this way, you can get to know about the status of your ITR and whether you are eligible for a refund or do you have to pay additional taxes.
Here, in this article, we will guide you through the process of assessing the income tax notice and the steps to take after reading it.
This article covers:
What is Section 143(1)
As per the directions of the Government of India, part 1 of Section 143 of the Income Tax Act, 1961-2018 deals with the responses to tax file returns. The process of executing the return, which is usually done under Section 139, or Section 142 (1), the latter being a tax filing demand notice sent by the department, is very detailed.
After you have submitted all the documents for the income tax return, the Centralised Processing Centre, or CPC, will process your application and verify whether all the information you submitted is correct. Not only the centre will calculate your aggregate income or loss, but will also check whether any tax, that is, the interest upon the income and additional fee, is chargeable on the total income.
After the adjustment, they will decide upon the final amount you have to pay or any refund you will get. However, they will send you an intimation either in the paper or electronically to your mail-id before processing the adjustments.
Normally they expect a response within a period of thirty days before making the final assessment of the taxes, however, if you don’t respond, they will act upon the initial adjustments.
The department will send you another intimation notice after they have computed your final liability for income tax and checked if any relief is permissible under Section 90 or 91. Meanwhile, if you are bound to receive any refund, that shall be paid to you.
What does the intimation notice contain?
Normally, there are three kinds of intimation notices available under Section 143(1). These comprise intimations without any demand or refund, intimations demanding tax liability, and intimations informing of refund. You will get the intimation notice, irrespective of its contents, at your registered email address only.
Also known as Intimation u/s 143 (1), it is a prima facie update on the information you reported in your ITR and whether it is the same as the records available at the Tax departments’ disposal. You will also get an SMS which will inform you about the intimation notice sent to your mail-id.
The first kind of intimation 143 (1) is the notice where they inform you that no adjustments have been made to the ITR you filed. The second kind of intimation under 143 (1) will inform you of tax liability if they find any kind of errors or discrepancies.
Such discrepancies include mathematical errors, wrong claims, i.e., claims that do not match the tax department’s information, disallowances of loss, or forgetting to include any additional income in the audit report in your tax filing.
The Income Tax Department will issue the third kind of intimation notice under Section 143(1) of the Income Tax Act if they find any interest or any tax refund to be payable to you. Usually, this third type is issued only after they have found zero adjustments to be made and have credited all the other taxes and interests that you have paid.
The Intimation notice will contain two columns of information side by side, indicating comparison. The first one states, “As provided by the taxpayer in the Return of Income,” and the second column is headed “As computed under Section 143(1)”. These two columns compare the following parameters:
- Income under various Sections is income from various sources, e.g., “income from salary.”
- The gross aggregate of your income
- “Intra head adjustments” such as various deductions made under the Chapter VI A of the act
- Tax-saving deductions, if any, that you have made while filing the return.
How to read the intimation notice
The intimation notice that you get under Section 143(1) of the Income Tax Act is encrypted with a password. You have to enter your PAN number followed by your date of birth in the dd-mm-yyyy format without any slashes and all letters in lower case, as your password. Only then will you be able to access it for reading.
Once you have opened the file, peruse it thoroughly. The first step is to verify whether all your personal details are correctly provided. Some of these details are name, PAN number, and residential address. You should also check the acknowledgment number for the online filing of the tax return, known as the e-filing number, and the financial year for which the notice has been sent.
Then proceed to check the type of the notice: whether it is intimation notice under Section 143 (1) of Income Tax Act return, a defective notice under Section 139 (9), or notice for scrutiny under 143 (2) because all these notices are largely similar in format. Reviewing the income and tax deduction details should be the next step of reading the intimation notice.
Then comes the full information on taxation, that is, the amount you have to pay as a tax on your net income, whether you get any relief or any interest to be paid under Sections A B C of 234. If you have filed your tax return late, then they will charge a late fine under Section 234 (F).
If your taxable income as computed by the department and the one that you have filed are not the same, it indicates a discrepancy regarding additional tax or refund. If the net taxable income is lower, they will pay you a refund; if higher, you have to pay additional tax. If you do not accept the discrepancies or the additional charges, you have to file a rectification application. If mistakes are made on your part, you have to revise your ITR and file it for a second time.
The intimation notice is only a primary update that you get after the processing of your ITR. In the future, you might get further updates like these should the Income Tax Department come across additional information regarding your income. Consult your tax advisor for detailed guidance on Section 143(1).