As an income-earning citizen of the country, filing an Income Tax Return (ITR) is your responsibility. It ensures that you contribute to the country’s development while complying with prevailing tax laws as well. Once you file an income tax return (ITR), the Income Tax Department assesses it. Based on its assessment, it may issue an income tax intimation under Section 143 (1) of the Income Tax Act of 1961.
What is an intimation u/s 143 (1) and what should you do in case you receive it? Keep reading to get the answers to these questions and more.
What is the Letter of Intimation Under Section 143(1)?
- An intimation under u/s 143 (1) can be considered a summary of the IT Department’s assessment of your return of income. It is an automated communication the IT department sends to the taxpayer after it has processed their ITR to let them know the outcome of their return.
- This intimation contains details related to your return and showcases issues like mathematical errors, missing tax payments, or internal mismatches. The entire process is automated, including the information presented in the intimation.
- If you receive this intimation, it is not always a cause for concern. The intimation is a standard part of tax filing and does not always mean there is a problem. It simply shows whether your tax calculations match the information that the department has on record. You can refer to the intimation to know the next step you should be taking.
When Does One Receive Intimation Under Section 143(1)?
A taxpayer receives an income tax intimation u/s 143(1) after their ITR has been successfully processed.
An income tax intimation u/s 143 (1) is sent in case of the following situations:
A Refund is Determined
If the tax paid exceeds the calculated tax liability (by more than ₹100), a refund is initiated.
Additional Tax Needs to be Paid
If the calculated tax liability exceeds the tax paid, the taxpayer is required to pay the balance amount.
No Adjustments are Needed
The ITR matches the department's records, and no further action is required.
What Does a Letter of Intimation Under Section 143(1) Include?
When you receive an income tax intimation u/s 143 (1), these are the key components you will likely come across:
Income Under Various Heads
Includes income reported under different categories such as salary, business income, capital gains, house property, etc.
Deductions, Exemptions, and Rebates
Details on the deductions claimed under sections like 80C, 80D, etc. as well as exemptions and rebates.
Tax Liability
Assessment of total tax liability based on income and deductions.
Tax Paid
Verification of taxes paid through TDS, advance tax, and self-assessment tax.
Refund or Demand
Indication of any refund due or additional tax payable.
Based on this information, you can take the required action.
Looking at the Nature of Adjustments Under Section 143(1)
Adjustments under Section 143(1) of the Income Tax Act are made to correct any discrepancies in your filed income tax return. Adjustments are usually made:
- If there are any mathematical mistakes in income, deductions, or tax calculations that can be identified and corrected by the system.
- If there are inconsistencies in your return — for example, income that should be reported under ‘Income from Other Sources’ is wrongly deducted from business income and not declared under the correct section.
- If you are trying to set off losses from earlier years but have filed those old returns late (after the due date).
- If your audit report shows that some expenses should not be claimed, but you have not removed them from your return.
What is the Time Limit for Intimation Under Section 143(1)
The Income Tax Department has to issue income tax intimation 143(1) within nine months from the end of the financial year in which the return was filed. This means that if a taxpayer files a return for the financial year 2024-2025 in August 2025, the department has until December 31, 2026, to process the return and issue the intimation. If you do not receive any intimation within this timeframe, it indicates that your return has been accepted as filed without any adjustments.
What Should the Taxpayer Do After Receiving Intimation Under Section 143(1)?
Upon receiving an income tax intimation 143(1), a taxpayer should take the following steps:
Check the Intimation Details
Compare the figures in the intimation with those in the filed return to understand any discrepancies or adjustments made by the department.
Respond to Adjustments
You can respond to the intimation based on what’s required from your end:
- No Discrepancies: If the intimation matches the filed return and no further action is indicated, no response is required.
- Refund Due: If a refund is determined, check if your bank account details are correct to ensure a smooth refund process.
- Additional Tax Demand: If additional tax is payable, verify the accuracy of the demand. If you are in agreement, pay the tax within the given time. If not, file a rectification request. Regardless of whether you agree or not, it is important to respond to the demand through the e-filing portal.
Keep a copy of the intimation and any related correspondence for future reference.
If you are unsure about what to do with the intimation or the appropriate course of action, it is best to consult a tax professional for guidance.
While an intimation is not always a cause for concern, it is ideal to accurately file ITR the first time. You can use an income tax calculator for quick estimates of your tax liability and ensure a more accurate ITR filing.
To sum up, an income tax intimation 143(1) is an important message from the Income Tax Department that helps keep your tax details accurate and transparent. As a taxpayer, it is your responsibility to check for and respond to this notice on time. By doing so, you can fix any errors on time, stay on top of your tax duties, and improve your tax planning for the coming year.
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