ITR 2024: Received Income Tax Intimation Under Section 143(1)? 5 points to note before you act

Income Tax Return: An intimation under Section 143(1) of the Income Tax Act is a formal notice issued by the Income Tax Department (ITD) subsequent to the evaluation of your Income Tax Return (ITR) submission. This communication serves as a concise overview of the ITD's evaluation of your tax obligations. The intimation provides a breakdown of the income you reported, juxtaposes it with data obtained from external sources, and delineates the determined tax sum. Furthermore, it brings attention to any inconsistencies, specifies any tax dues or refunds owed to you, and contains a processing code indicating the decision of your ITR assessment.

Intimation under section 143(1) is issued for:

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> Incorrect claim deductions, where a claim under section 80C exceeds the maximum permissible limit of Rs 1,50,000, leading to disallowance of the excess amount in the intimation.
> Disallowance of certain expenditures highlighted in the audit report but not factored into the computation of total income in the return.
> Verification of Advance Tax, Self-assessment tax, and TDS details as per Form 26AS for accuracy and consistency.
> Inclusion of additional income reported in Form 26AS, Form 16A, or Form 16 that was not initially included in the Income Tax Return.
> Claiming losses for carry forward to the next year in cases where the return was submitted after the due date, or setting off losses from the previous year in delayed return filings.
> Whether deduction under section 10AA, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID, 80-IE has been taken after the due date of the Income Tax Return
> Calculation of tax, late filing fees, interest, and others.

Primary reasons why an intimation order is issued

Every taxpayer receives an intimation under section 143(1) of the Income Tax Act once their return has been successfully processed. The intimation can pertain to the following primary situations:

> Tax Refund: If the taxpayer has overpaid their taxes, the intimation will include details about the refund amount. Refunds exceeding Rs. 100 will be issued to the taxpayer, while amounts below this threshold will not be paid out.

> Tax Shortfall: In cases where the taxpayer has not paid sufficient taxes as per the computation, the intimation will specify the deficient amount. Along with this information, a challan for making the required payment will be provided.

> Simple Notice: When the tax returns submitted by the taxpayer match the assessment conducted by the assessing officer, a simple notice will be sent. In such scenarios, no separate intimation under section 143(1) will be dispatched, and the taxpayer should regard the ITR V acknowledgment of filing the return of income as the intimation notice.

Deadline for issuing intimation notice

The deadline for issuing the intimation notice has been extended by three months, starting from April 1, 2021. The intimation notice should be issued within nine months from the conclusion of the financial year in which the tax return is submitted.

For the financial year 2023-24 (assessment year 2024-25), the deadline for filing the income tax return was July 31, 2024. Consequently, the income tax department is mandated to issue an intimation notice within nine months (by December 31, 2025) from the termination of the financial year in which the income tax return was lodged (by March 31, 2025).

What should be done on receiving intimation u/s 143(1)?

After receiving an intimation under Section 143(1), the taxpayer should follow the steps outlined below:

Review the Section 143(1) intimation to ensure it aligns with your filed return and applies to the correct financial year. Verify details such as name, PAN, address, assessment year, and e-filing acknowledgment number.

In case you spot discrepancies in your return based on the Section 143(1) intimation, you can rectify them by submitting a revised return on the income tax e-filing website.

Suppose there are no errors in your return but you disagree with the adjustments made by the Centralized Processing Center (CPC) or the computerized system. In that case, you have the option to file an online rectification application under Section 154(1) to address the inaccuracies in the Section 143(1) intimation. For further guidance, please refer to our article on filing rectification applications.

Respond through the e-filing portal regarding any tax demand, stating your agreement or disagreement with the assessment.

If you are discontent with the handling of your rectification return by the Central Processing Centre (CPC), you have the option to lodge online grievances or get in touch with your assessing officer. In the event that you do not receive a satisfactory resolution from either the CPC or the assessing officer, you retain the right to submit a complaint to the income tax ombudsman for further assistance.