Intimation u/s Section 143(1) - Password for ITR Notice

Introduction

The Income Tax Act of a country plays a crucial role in governing the taxation system and ensuring compliance from taxpayers. In India, the Income Tax Act, of 1961, outlines various provisions and sections that govern income tax filing and assessment. One such important section is Section 143(1) of the Income Tax Act, which deals with the issuance of intimation to taxpayers after processing their income tax returns. This guide aims to provide a comprehensive understanding of Section 143(1) and guide taxpayers on how to respond to intimations effectively.

Section 143(1) of the Income Tax Act: Intimation Explained

Section 143(1) of the Income Tax Act refers to the communication sent by the Income Tax Department to taxpayers after processing their income tax returns. It is important to note that an intimation under Section 143(1) is not an assessment order but rather a preliminary review of the information provided by the taxpayer in their return. The purpose of this intimation is to inform the taxpayer about the computation of their total income, the tax liability, and any discrepancies or adjustments made by the Income Tax Department.

The intimation under Section 143(1) contains various details related to the taxpayer's return, including their permanent details, income tax return filing details, refund sequence number, tax calculation, and the tax computed as per the department. It serves as a summary of the details submitted by the taxpayer and the details considered by the department while processing the return.

Sample Intimation letter u/s 143(1)

Importance of Intimation u/s Section 143(1)

The issuance of an intimation under Section 143(1) holds significant importance for both taxpayers and the Income Tax Department. It serves as a means of communication between the department and the taxpayer, providing them with crucial information regarding their tax liability and the adjustments made by the department. Here are some key aspects highlighting the importance of intimation u/s Section 143(1):

1. Review of Computed Tax Liability

The intimation allows taxpayers to review the computation of their total income and tax liability as per the department's assessment. It provides them with an opportunity to cross-verify the calculations and ensure accuracy in the tax assessment process.

2. Information on Adjustments and Discrepancies

The intimation highlights any discrepancies or adjustments made by the Income Tax Department during the processing of the return. This information enables taxpayers to identify errors, omissions, or inconsistencies in their filing and take necessary corrective actions.

3. Early Awareness of Refunds or Tax Payable

For taxpayers expecting a refund, the intimation provides them with early awareness of the refund amount and the timeline for its disbursement. Similarly, for taxpayers with a tax liability, the intimation informs them about the amount due and the due date for payment.

4. Opportunity for Rectification or Appeal

If taxpayers disagree with the adjustments made by the department or believe that there are errors in the intimation, they have the opportunity to seek rectification or initiate an appeal under the provisions of the Income Tax Act. This ensures transparency and allows taxpayers to address any grievances or discrepancies effectively.

5. Compliance with Income Tax Laws

The intimation serves as a reminder for taxpayers to comply with income tax laws and fulfill their obligations. It prompts them to rectify any errors, pay outstanding taxes, or take necessary actions to ensure compliance with the provisions of the Income Tax Act.

Key Causes of Intimation u/s Section 143(1)

The issuance of an intimation under Section 143(1) is triggered by various factors that lead to adjustments or discrepancies in the taxpayer's return. The Income Tax Department conducts a thorough review of the return and cross-checks the information provided by the taxpayer with the data available to them. Here are some key causes that can result in the issuance of an intimation under Section 143(1):

1. Discrepancies in Income Details

One of the primary causes for an intimation is the presence of discrepancies or mismatches in the reported income. This can include variations in salary income, business income, interest income, or any other sources of income declared by the taxpayer.

2. Mismatch in TDS Details

Another common cause for an intimation is discrepancies in the Tax Deducted at Source (TDS) details reported by the taxpayer. If there are variations between the TDS details provided by the taxpayer and the data available with the Income Tax Department, it can result in adjustments and the issuance of an intimation.

3. Errors in Deductions and Exemptions

Inaccuracies or omissions in claiming deductions or exemptions under various sections of the Income Tax Act can also lead to adjustments in the intimation. The department reviews the deductions and exemptions claimed by the taxpayer and verifies their eligibility and accuracy.

4. Incorrect Tax Payments

Differences in the amount of tax paid by the taxpayer and the tax liability computed by the Income Tax Department can result in adjustments in the intimation. If the taxpayer has underpaid or overpaid their taxes, it will be reflected in the intimation.

5. Mismatch in PAN or Aadhaar Details

Incorrect or mismatched Permanent Account Number (PAN) or Aadhaar details provided in the return can trigger adjustments and the issuance of an intimation. Taxpayers need to ensure the accuracy and consistency of their PAN and Aadhaar details.

6. Non-Verification or Non-E-Verification of Return

Failure to verify or e-verify the filed income tax return within the specified timeline can result in adjustments and the issuance of an intimation. Verification is a crucial step in the return filing process, and non-compliance can lead to discrepancies in the assessment.

7. Non-Filing of Tax Return

If a taxpayer fails to file an income tax return when their income exceeds the exempt limit or when they are liable to file a return as per the provisions of the Income Tax Act, it can result in the issuance of an intimation.

8. Calculation Errors

Mathematical errors or calculation mistakes in the return can lead to discrepancies in the computed tax liability. Taxpayers must double-check their calculations and ensure accuracy in their filing.

9. Non-Disclosure of Income

Deliberate or unintentional non-disclosure of certain income sources or assets can result in adjustments and the issuance of an intimation. Taxpayers need to provide complete and accurate information regarding their income sources.

10. Non-Compliance with Income Tax Rules

Violation of specific rules or provisions of the Income Tax Act can lead to adjustments during the processing of the return. Non-compliance with income tax rules can trigger the issuance of an intimation.

It is important for taxpayers to carefully review the intimation received under Section 143(1) and address any discrepancies or errors promptly. The intimation serves as a communication tool to inform the taxpayer of the adjustments made during the processing of the return, and resolving any issues promptly contributes to a smoother and more accurate income tax assessment process. If there are disagreements with the adjustments, the taxpayer may need to take corrective action and, if necessary, follow up with the Income Tax Department.

Time Limit for Issuing Intimation u/s 143(1)

According to the Income Tax Act, the intimation under Section 143(1) can be issued only within one year from the end of the financial year in which the return is filed. This means that the department has a time limit of one year to send the intimation to the taxpayer after the processing of their return. Taxpayers need to keep track of the timeline and ensure that they receive the intimation within the stipulated time frame.

If a taxpayer hasn't received an intimation within one year from the end of the financial year in which they filed their return, their ITR-V acknowledgement will be deemed as the intimation. However, it is recommended to verify online whether the Income Tax Department has processed the return to confirm the status of the intimation.

Actions to be Taken Upon Receiving an Intimation under Section 143(1)

Upon receiving an intimation under Section 143(1), it is crucial for taxpayers to carefully review the details provided and take appropriate actions based on the findings. Here are the key actions that taxpayers should consider:

1. Review and Verify the Details

The first step is to review and verify the computation of total income, tax payable or refundable, and any adjustments made by the Income Tax Department. Cross-checking the details against the information provided in the return will help identify any discrepancies or errors.

2. Agreeing with the Tax Payable or Refund Amount

If the taxpayer agrees with the tax payable or refund amount indicated in Section 143(1) intimation, they can proceed by either making the payment for any outstanding taxes or simply expecting to receive the refund amount specified.

3. Disagreeing with the Adjustments

If the taxpayer finds discrepancies in the calculations made by the Income Tax Department or believes that there are errors in the intimation, they have the option to either submit an online request for rectification under Section 154 or initiate an appeal under Section 246A if necessary.

4. Net Refundable or Payable Amount is Zero

In cases where the net refundable or payable amount is zero, the taxpayer may consider the intimation received under Section 143(1) as the conclusion of the return filing process for the relevant financial year, as per the information provided by the Income Tax Department.

Taxpayers need to take timely actions upon receiving an intimation and address any discrepancies or errors promptly. This will ensure accurate tax assessment and compliance with the provisions of the Income Tax Act.

What to Do If No Intimation is Received Within the Given Time Frame

If a taxpayer hasn't received any intimation from the Income Tax Department within the given time frame, it is important to take the following steps:

1. Verify Online

Taxpayers can verify the status of their return online by logging into the Income Tax e-filing portal. Checking the online status will help determine whether the return has been processed and if the intimation has been issued.

2. Contact the Income Tax Department

If no intimation has been received within the stipulated time frame and the online status does not provide any clarity, taxpayers can contact the Income Tax Department through the designated helpline or email address to inquire about the status of their return and intimation.

3. Deemed Intimation

In cases where no intimation is received within one year from the end of the financial year in which the return was filed, the ITR-V acknowledgement will be deemed as the intimation. Taxpayers should keep a record of their ITR-V acknowledgement as proof of filing.

It is important for taxpayers to proactively follow up with the Income Tax Department if no intimation is received within the given time frame to ensure the timely resolution of any pending matters.

Where to Find Your ITR Intimation

Taxpayers can find their Income Tax Return (ITR) intimation by logging into the Income Tax e-filing portal. After logging in, they can navigate to the "My Account" section and select the option for "View Intimation u/s 143(1)." The intimation will be available for download in PDF format.

It is advisable for taxpayers to regularly check their online accounts on the Income Tax e-filing portal to stay updated on the status of their return, intimation, and any other communication from the department.

Understanding the Password for Intimation Order

To access the intimation under Section 143(1) on the Income Tax e-filing portal, taxpayers need to enter a password. The password is a combination of the taxpayer's PAN (in lowercase) and their date of birth (in the format DDMMYYYY). For example, if the taxpayer's PAN is ABCDE1234F and their date of birth is 1st January 1990, the password would be "abcde1234f01011990."

It is important to note that the password is case-sensitive, and any incorrect entry may result in the inability to access the intimation. Taxpayers should ensure they enter the password accurately to view and download their information.

Precautions When Reviewing an Intimation under Section 143(1)

While reviewing an intimation under Section 143(1), taxpayers should exercise caution and consider the following precautions:

1. Cross-Verify the Details

Taxpayers should cross-verify the details provided in the intimation with the information provided in their return. This includes verifying the income details, deductions claimed, exemptions, and any adjustments made by the department.

2. Check for Accuracy

It is important to check the accuracy of the calculations made by the Income Tax Department. Cross-checking the tax liability, refundable amount, and any adjustments will help identify any discrepancies or errors.

3. Seek Professional Assistance

If taxpayers are unsure about any aspect of the intimation or need guidance in understanding the adjustments made, it is advisable to seek professional assistance from a qualified tax consultant or chartered accountant. They can provide expert advice and help address any concerns or queries.

4. Keep Documentation

Taxpayers should maintain proper documentation of the intimation and any related correspondence with the Income Tax Department. This will serve as a record for future reference and help in case of any disputes or appeals.

By taking these precautions, taxpayers can ensure that they review the intimation thoroughly and address any discrepancies or issues effectively.

The taxpayer’s returns are received, and processed strictly online in the centralised processing centre. Once the return is processed, an intimation under section 143(1) shall be sent to the taxpayers by the income tax department.

Worry not if you get such a notice related to income tax. We at The Tax Heaven are here for you. We request you to email us at thetaxheavenjpr@gmail.com and our team of experts will revert back on it.