December 18, 2018

Received intimation under section 143(1)? – Don’t get paranoid !

Receiving an e-mail intimation or notice from the I-T Dept is a scary proposition for all of us. However, these intimations and notices are not always as frightening as perceived.

After a return is filed, I-T Dept examines its correctness at various stages, computerized examination under 143(1) being the first step.

What is 143(1) assessment?

At this stage, I-T Dept conducts a preliminary check of the income and deductions submitted in return. By this check, Final Tax Payable or Refundable is calculated and intimated to the taxpayer.

If the tax payable or refundable is zero or less than ₹ 100, the return filing process completes with the receiving of 143(1) intimation.

What are the adjustments made during 143(1) assessment?

I-T Dept. will calculate the total income or loss and the tax payable or refundable by making following adjustments –

  • Arithmetical error,
  • Incorrect claim apparent from information filed in return,
  • Disallowing the loss claimed if the return was filed after specified due date,
  • Disallowing the expenditure shown in the audit report but not considered while calculating the total income in return,
  • Disallowing deductions under section 10AA, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or 80-IE, if the return was filed after specified due date,
  • Additional income appearing in Form 26AS, Form 16 or 16A but not reported in the tax return.

By such adjustments, final tax payable (including interest) or tax refundable will be calculated and specified in the intimation.

What is the time period for sending intimation under section 143(1)?

Dept. has to send intimation under section 143(1) within 1 year from the end of the Financial Year in which return is filed.

If it is sent after 1 year, it will be INVALID,and the taxpayer is not required to pay any tax demand.  

What are the details mentioned in the intimation?

First Part
  1. Name and address of the taxpayer
  2. Assessment Year
  3. ITR Type
  4. Date of Order
  5. Communication Reference No.
  6. E-filing Acknowledgement No.
  7. Due date and actual date of filing return
  8. PAN number
  9. Jurisdictional Assessing Officer details
  10. Residential Status
Second Part

Here the I-T Dept provides side by side comparison of income and tax as computed by the Dept. under section 143(1) vis-à-vis income and tax reported by the taxpayer in his return.

If any income is added or deduction is reduced, it will be shown in the “As computed under section 143(1)” column.

At the end of the table, “Net amount payable” or “Net amount refundable” is mentioned.

How to respond to the intimation?

If the taxpayer agrees with the demand (tax and interest payable) computed by Dept. due to 143(1) examination, he has to pay the demand within 30 days of receipt of the intimation. Demand can be paid online or physically with an authorized bank branch.

If the taxpayer is aggrieved with the outcome of intimation, he can request for a rectification request as per Section 154. For this, he has to log in on the income tax website and select “Rectification Request” under My Account section. 

So, next time if you receive any intimation, grab a cup of coffee, relax, and then open the email!

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