September 28, 2018

This is how IT-Dept processes Income Tax Returns after you file it

Filing the income tax return is a daunting task. Congratulations, if you have completed it successfully. You must be curious to know what happens to the income tax return after you file it, and how the Dept. processes it further.

Before we delve into the post-return-filing process; please ensure that you e-verify the return or send a signed acknowledgement copy to CPC, Bengaluru. IT Dept doesn’t consider an unverified return as a filed return. You can log in on income tax website to e-verify it or download ITR-V acknowledgement.

Once the return is verified, IT-Dept follows below-mentioned steps to process every income tax return –


Initial processing under 143(1)

IT-Dept adopts a computerised system to conduct the initial processing of income tax returns. During this process, Dept. checks for arithmetical errors or incorrect claims apparent from the returns. On the basis of such checking, it re-calculates the total income and tax liability and reconciles it with details filed in return.

If the “tax payable or refundable” changes (increase/ decrease) due to initial checking, IT-Dept intimates by sending a notice under section 143(1) to the taxpayer.

In the case of NIL tax returns or if the tax liability doesn’t change due to initial checking, the taxpayer will not receive any notice under 143(1).

IT-Dept cannot send the notice u/s 143(1) after one year from the end of Financial Year in which return is filed.


Scrutiny notice under 143(2)

If the Dept. considers that the taxpayer may have under reported his income or paid lesser taxes, or has shown excessive losses in return, the Assessing Officer may send a notice to the taxpayer to provide the necessary books of accounts, records or any other information. He will carry out a thorough review of the information and accounting records to check the correctness of deductions, incomes, losses and additional information filed in return.

Income Tax Department can send the notice u/s 143(2) only within 6 months from the end of Financial Year in which return is filed.


Assessment under section 143(3)

After examining all the documents and books of accounts, the Assessing Officer will issue a written notice to intimate the revised income and tax payable or refundable, and the period in which the taxpayer has to deposit the tax demand (if any).

For returns related to FY 2017-18 (AY 2018-19), the Assessing Officer has to complete the assessment within 18 months from 31st March 2019. For returns relating to FY 2018-19 and afterwards, the assessment has to be completed within 12 months from the end of Assessment Year, to which the return pertains.


How to check the notices and intimation from Dept?

IT-Dept sends all the notices, intimation and other information on the registered mail ID. Keep an eye on the inbox (SPAM folder also) for any mail related to income tax. Also, you can check the e-notices and intimations by logging on the income tax website and clicking on “E-Proceedings”.


Unsure of how to deal with any notice or intimation received from IT Dept? E-mail us the copy of notice and our team will be happy to serve you. 


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