Income Tax Intimation U/S 143(1)

Income Tax Intimation U/S 143(1)

ITR filing procedure does not finish on the stage of verification. When the person has validated his tax returns, the income tax department initiates the tax return process. Post to the process of income tax return, the income tax department sends the intimation notice.

Under section 143(1) of the Income-tax Act, 1961, the intimation notice shall be sent. On the enrolled email ID of the income tax return filer, the notice will be sent. Then the SMS shall be sent on the filers enrolled mobile number where it informs that the person has been given an intimation notice on his email ID, which is registered in the income tax department.

While processing the ITR, the tax council verify the arithmetical mistakes, internal inconsistencies, tax and interest calculation and checks tax payment filed, etc.; when the ITR is processed, the tax council sends the intimation beneath section 143(1). But you must note that during the time of operation of ITR, the tax department makes a prima facie check. They can still give you a notice regarding income tax in the coming time beneath the distinct section urging for more details.


Preliminary Assessment under 143(1)

CPC's initial processing of returns is wholly automated, and Section 143(1) Intimation is also a computer-generated record. CPC validates data provided in each tax return with details available with the income tax department’s record (such as form 26AS generated through details provided by collecting banks, form 16, TDS returns, etc.). This notice usually only points out apparent mistakes found out by the mainframe system.

  1. Once the return is filed, total income or loss is recomputed by the computerized system as per the department’s record and provides a comparison with data filed by the taxpayer.
  2. The intimation has two columns: ‘As provided by the taxpayer in the Return of Income’ and ‘As computed under Section 143 (1). 
  3. Comparison is made for major categories such as 
  4. income under various heads, 
  5. Gross Total Income,
  6. Deductions under Chapter VIA (80C, 80D etc.), and 
  7. Tax deducted at source and tax payments by taxpayers in the form of advance tax and self-assessment tax.
  8. Appropriate adjustments are made to income as computed under Section 143(1), and final tax liability or refund arrived.
  9. The adjustments are carried out only after intimating to the taxpayer of the proposed adjustments either in writing or electronic mode, i.e., to the email id provided in the income tax return filed.
  10. Response received from the taxpayer within 30 days from the issuance date of intimation will be considered before making the final adjustment. If no response is received within such a period, adjustments arrived at initially will be incorporated.
  11. After arriving at the final tax liability, the same is adjusted against TDS and tax payments and other relief under Section 90/91, if any.
  12. An intimation shall be prepared and sent to the assessee. 

 Kind of intimations possible are discussed below:

  1. Intimation with no demand or no refund – This generally happens if the department has accepted the return as filed without carrying out any adjustments to it.
  2. Intimation determining demand – issued in case of adjustments made under Section 143 (1) due to a discrepancy found and tax liability is arrived at.
  3. Intimation determining refund – issued where any interest or tax is found to be refundable either where no discrepancy is found in return already filed or after making adjustments as referred to in Section 143(1) and after giving credit to the taxes and interest paid by the taxpayer.
  4. While demand notice is sent in case of final tax liability, refunds, if any, shall be granted to the taxpayer.

What is to be Validated in Intimation Section 143(1) Notice?

The intimation notice shall state the mentioned one of the things:

A) Tax calculations, income components, deductions filed for a claim to match with tax debt. Assessments/calculations: the case specified that there will be no extra tax payable through you in the notice. Indeed, the tax payable, as well as refundable, will display as zero.

B) Additional tax demand notice: there might be circumstances in which you forgot to report the specific income in your tax return or might be claimed the deduction or miscalculated your tax because of which you are liable to pay more tax. Towards these conditions, the tax council sends you their assessment and urges you to pay more.

C) Income tax refund: In these cases, under the assessment of the income tax departments, you have to file more taxes concerning the original tax amount. In these cases, the income tax refund will be displayed as due.


Password for intimation under Section 143(1)

The intimation received under Section 143(1) is password protected. The ITR intimation password will be your PAN (in lowercase) followed by the date of birth in DDMMYYYY format without giving any space.

 

 For example: Assuming your PAN is ABCDE1234E and the date of birth is 01/01/2000, the password to open the intimation will be “abcde1234e01012000”.

Time Limit for the issue of 143(1)

Section 143(1) intimation has to be sent within one year from the end of the financial year in which the return is being filed. E.g., if the taxpayer has filed a return pertaining to the financial year 2019-20 in July 2019, intimation can be sent any time till 31 March 2021. Suppose a taxpayer does not receive any intimation within such period. In that case, it simply means there are no adjustments carried out to the return filed by the taxpayer, and no change in tax liability/refund and acknowledgement filed itself is deemed to be Section 143(1) intimation.

Action to be taken by the taxpayer after receiving a 143(1)

  1. As a first step, review certain things in Section 143(1) intimation to ensure the document pertains to your return itself and data provided pertain to the same financial year as mentioned in Section 143(1) intimation. 
  2. Check the name, PAN, address, assessment year for which notice has been sent, e-filing acknowledgement number. 
  3. If you can identify the mistakes, you have made while filing your return from the 143(1) intimation, and they can be rectified by filing a revised return, please do so by logging into the income tax e-filing website.
  4. However, suppose no mistakes have been made, and you disagree with the CPC/computerized system adjustments. In that case, you can file an online rectification application under Section 154(1), intimating the correction of the mistake appearing in Section 143(1) intimation.
  5. If you are not satisfied with processing your rectification return by CPC, you can also file online grievances or contact your assessing officer. In case of no satisfactory action from the CPC/assessing officer, you can file a complaint to the income tax ombudsman. 

However, if the taxpayer agrees to the tax demand raised by the income tax department after carrying out adjustments as above, the taxpayer must pay such taxes. However, while paying tax on the demand raised under this Section, please choose ‘Tax on regular assessment (400)’ under the type of payment in the challan.


 


For more information on this visit www.taxaj.com.

Posted by Pooja
Team Taxaj



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