How to deal with Intimation under Section 143(1) of Income Tax

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As the name states, an Intimation under Section 143(1) is only an Intimation and not a Scrutiny/ Assessment Order. Intimation under Section 143(1) is an auto-generated letter by the computers of the Income Tax Department without any human interference.

Intimation under Section 143(1) is sent only in the following 3 cases:-

  1. Where any tax or interest is found payable on the basis of the return after making adjustments referred to in Section 143(1) and after giving credit to the taxes and interest paid; or
  2. Where any tax on interest if found refundable on the basis of the return after making adjustments referred to in Section 143(1) and after giving credit to the taxes and interest paid; or
  3. Where adjustments referred to in Section 143(1) have been made resulting in increase/ reduction of loss declared by the assessee and no tax or interest is payable by the assessee and no tax or interest is refundable to the assessee.

The maximum time period for sending intimation under Section 143(1) is 1 year from the end of the financial year in which the income tax return is filed.

No Intimation if No Tax Payable or Refundable

Intimation under Section 143(1) is sent by the Income Tax Department only in case any tax or interest is found payable or refundable or there is any increase/reduction in loss.

If there is no tax or interest payable or refundable on the basis of the return, or no adjustment is made resulting in reduction/increase in loss, then intimation under section 143(1) shall not be sent to the assessee.

In such a case, the ITR V Acknowledgement of filing of return of income is deemed as intimation under section 143(1).

income-tax-intimation

Adjustments to be made under Section 143(1)

The total income or loss shall be computed after making the following adjustments:-

  1. Any arithmetic error in the return
  2. Any incorrect claim apparent from any information in the return shall mean a claim on the basis of an entry, in the return of an item:-
    • which is inconsistent with another entry of the same or some other item in the income tax return.
    • in respect of which, information required to be furnished to substantiate such entry, has not been furnished under this Act.
    • in respect of which a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction.

How to deal when you receive Intimation under Section 143(1)

If you have received intimation under Section 143(1), you are requested to check the reason for receiving intimation. The intimation would show the income tax return as filed by you and the computation as done by the income tax department.

If you are satisfied with the computation done by the income tax department, you should pay the amount of tax payable as per Section 143(1). And in case any refund is due, you don’t have to do anything and you’ll receive the interest in the due course of time.

However, in case you are not satisfied with the computation done by the income tax department, you are requested to contact your Income Tax Officer and discuss with him the reasons for the differences.

Relevant Points regarding Intimation under Section 143(1)

  • An income tax return can be revised under Section 139(5) even if intimation under Section 143(1) has been received since Section 143(1) is not an assessment but only intimation.
  • In many cases, only a soft copy of Intimation under Section 143(1) is sent to the registered email-id of the taxpayer and the hard copy may or may not be sent to the postal address.

A Personal Finance enthusiast, Karan is the founder of charteredclub.com and loves to discuss about Money related matters.