Intimation under Section 143(1) of Income Tax Act: Everything You Should Know

 

What happens when you have paid lower or higher than required taxes? In this situation, the Income Tax Department will send an intimation under Section 143 (1) of the Income Tax Act and ask you to make a rectification or apply for refunds. 

An intimation u/s 143 (1) serves as a preliminary assessment of the taxpayer's income tax return filed for a particular financial year. It is a message which notifies the taxpayer of any kind of error prevailing in his/her tax filing. It also tells the taxpayer of any kind of interest payable or refundable in his account.  

Let us learn more about income tax intimation and its function. 

What Is Intimation u/s 143(1)?

Intimation under Section 143 (1) is a communication/notification sent to a taxpayer by the Income Tax Department after it has processed their income tax return. It is a preliminary computation of a taxpayer's tax liability. It states whether the returns filed by a taxpayer match the tax computation done by the tax department.

When Does One Receive Intimations under Section 143 (1)? 

One receives intimations under Section 143 (1) in these circumstances:

• When a taxpayer's return has a refund due, but the tax department made certain changes

• When there is a demand for additional tax or interest payable by a taxpayer

• When there is no demand or refund, but the taxpayer's return has been processed

How Will I Receive This Notice?

The Income Tax Department sends intimations under Section 143 (1) to the taxpayer's registered email address or through the registered account on the income tax e-filing portal. Taxpayers may also receive an SMS on their registered mobile number stating that the intimation has been sent. 

It is important to ensure that the email address and contact details provided when filing income tax returns (ITR) are accurate and up to date.

Sample of an Intimation under 143(1)

Intimation received under Section 143 (1) consists of various details such as taxpayer's name, PAN and assessment year. It will also have a detailed computation of the total income, deductions, tax payable, refunds due (if any), and any adjustments made by the department. 

Furthermore, it will contain a summary of any additional tax or interest payable or refund issued to the taxpayer (if any).

What Do Notices under Section 143 (1) Say?

A notice received under Section 143(1) will state whether the tax computed by a taxpayer matches the computation done by the department. It will mention any adjustments made by the department, which may lead to additional tax liability, interest payable, or refund due to a taxpayer. It is essential to review the notice carefully to understand the exact nature of adjustments made. It may suggest any of these situations:

1. The department’s assessments match with your self-assessed tax calculations and deductions claimed thereon. It simply means that neither you are required to pay any additional tax nor will you get any tax refunds.

2. In case the income tax department's calculations do not match your calculations or your declared source of income, a demand notice will be sent for additional tax. This scenario may arise either due to mathematical error or you might have claimed wrong deductions. There will be a tax demand at the end of this notice. 

3. In some instances when you pay more taxes than required, the department will issue an income tax refund notice. Subsequently, it will send you a refund.

Nature of Adjustments under 143(1)

Adjustments made under Section 143(1) can be of various types, including:

• Any income, deductions, or exemptions missed by the taxpayer

• Mismatched information compared to Form 26AS, which includes TDS, advance tax, and self-assessment tax

• Reassessing the taxpayer's income, deductions, or tax liability based on available information

• Mathematical errors or incorrect claims made by the taxpayer

Time Limit for Issue of 143(1) 

The Income Tax Department is required to issue intimation under Section 143(1) within a time limit. Generally, it should be issued within one full year from the end of the financial year during which the assessee files an income tax return. However, this period may be extended when the taxpayer's return is selected for scrutiny assessment or reassessment.

What If You Do Not Receive Any Intimation Till the End of a Year?

Let’s say a taxpayer has not received any intimation under Section 143(1) until the end of one full year from the end of the fiscal year when he/she had filed returns. This indicates that the taxpayer's return has been processed without any adjustments. In such cases, the taxpayer can assume that their return has been accepted by the Income Tax Department.

How to Get an Intimation u/s 143(1) Again?

Taxpayers can easily obtain intimation under Section 143(1) again by following these steps:

Step 1. Log in to the income tax e-filing portal.

Step 2. Go to "My Account".

Step 3. Click on "View e-Filed Returns/Forms."

Step 4. Select the appropriate assessment year.

Step 5. Click on the acknowledgement number of the tax return for which intimation is required.

Step 6. Download the intimation in PDF format.

Where to Find the Password to Open Intimation u/s 143(1)?

Intimations received under Section 143(1) are protected by password for security reasons. This password consists of the taxpayer's PAN (written in lowercase) and the date of birth or incorporation (in the DDMMYYYY format). For instance, if your PAN is "ABCDE1234F" and your date of birth (DoB) is 10th November 1995, the password is "abcde1234f10111995."

How Can I Read an Intimation Received Under Section 143 of the Income Tax Act?

To read an intimation received under Section 143, follow these steps:

Step 1. Download the intimation from the income tax e-filing portal.

Step 2. Open the downloaded PDF file.

Step 3. Enter the password, as mentioned earlier, to unlock the PDF file.

Step 4. Read the contents of the intimation carefully to understand the adjustments made by the department and the taxpayer's tax liability or refund.

Examine the Following Aspects When You Receive an Intimation u/s 143(1)

When receiving an intimation under Section 143(1), you should examine the following aspects:

1. Ensure the correct PAN, name, and address are mentioned in the intimation.

2. Verify if the income, deductions, and exemptions mentioned in the intimation match your tax return.

3. Check for any additional tax liability, interest payable, or refunds due.

4. Review the adjustments made by the department and cross-verify with your original tax return.

5. If any discrepancy is found, seek professional assistance.

Do I Need to Respond to the Notice? 

There is no need to respond to the notice/intimation under section 143(1). It does not require any action from the taxpayerif there are no adjustments or the adjustments have been accepted. However, if a taxpayer disagrees with the adjustments made or needs to provide additional information, they should respond within the specified time.

How to Respond to Income Tax Notice Under Section 143 (1) of the Income Tax Act?

To respond to an income tax notice under Section 143(1), follow these steps:

Step 1. Understand the nature of adjustments made and the reasons mentioned in the notice.

Step 2. Prepare a response providing appropriate explanations, supporting documents, or corrections.

Step 3. Submit your response within the specified time, either online through the income tax e-filing portal or by physically visiting a designated office.

Step 4. Maintain a copy of your response and proof of submission for future reference.

How Will I Get the Refund?

If the intimation under Section 143(1) shows a refund due to the taxpayer, the refund amount will be processed by the Income Tax Department. The refund will be credited directly to the taxpayer's bank account, which should be pre-validated and linked to the PAN on the income tax e-filing portal. The taxpayer can track the status of their refund online through the official portal.

Intimation under Section 143(1) of the Income Tax Act is an important communication that taxpayers receive after the processing of their income tax return. It provides a preliminary assessment of the taxpayer's tax liability and highlights any adjustments made by the Income Tax Department. Taxpayers should carefully review all details provided in an intimation, respond if necessary, and take appropriate action to ensure compliance with tax laws.

FAQs on Section 143(1) of Income Tax Act

1. What is Section 143 (1) in income tax?

Section 143(1) in income tax stipulates the manner in which an individual or a company's income tax returns need to be processed. It is an automated process where the tax department verifies the information provided in the return against their own records. An intimation is sent to the taxpayer with details of discrepancies (if any).

2. How to open intimation u/s 143(1)?

To open intimation u/s 143(1), you need to log in to the e-filing portal of the Income Tax Department using your credentials. Go to the 'My Account' tab and select 'View e-Filed Returns/Forms'. Then, click on the acknowledgement number of the relevant assessment year, and the intimation will open as a PDF file.

3. What to do if there is no mismatch in an intimation u/s 143(1) notice, demand, or refund?

If there is no mismatch in an intimation u/s 143(1) notice, demand, or refund, you can simply accept the intimation. It means that the Income Tax Department has accepted your return without any changes or adjustments. You can proceed with the payment of any tax due or claim your refund, if applicable.

4. How do I file rectification for intimation u/s 143(1)?

To file a rectification for intimation u/s 143(1), you can use the online facility provided on the e-filing portal of the Income Tax Department. Log in to your account, go to 'My Account', and select 'Rectification'. Provide the necessary details and reasons for rectification, and submit your application.

5. How do you respond to an intimation under section 143 (1)?

To respond to an intimation under section 143(1), carefully review the notice and verify all calculations and adjustments made by the Income Tax Department. If you agree with the changes, accept the intimation and proceed with the necessary actions. If you disagree, you can file for rectification and provide supporting documents to support your claim.

6. Is intimation u/s 143(1) an assessment order?

No, intimation u/s 143(1) is not considered an assessment order. It is a preliminary assessment process where the Income Tax Department verifies the information provided in the income tax return. An assessment order is issued after a detailed examination of one’s tax returns.

ARN - INT/ED/01/24/7918