Many taxpayers are of the opinion that the process of filing income tax return (ITR) ends once they verify their tax returns. However, actually, the situation is different. The income tax department starts processing your ITR once you verify your ITR. But the process will end once you receive the I-T department’s intimation under section 143(1) of the Income Tax Act 1961.
Taxpayers receive this intimation on their registered email id and SMS is also sent on the filer’s registered mobile number informing him that the intimation has been sent to his email id. As per the revised income tax rules, the intimation notice under section 143(1) has to be sent within nine months of the end of the financial year in which the tax return is filed. For instance, if you are filing your ITR in the current assessment year (AY 2021-22), then you should get the intimation notice on or before December 31, 2021.
What the intimation notice under section 143(1) says?
The notice informs you whether the income tax calculation, interest calculation, refund calculation and the tax paid by you is as per the information the I-T department has. The tax department checks for any inconsistencies, arithmetical errors, tax and interest calculation and verifies tax payment made etc. Once the ITR is processed, the tax department sends the intimation under section 143(1). It may be noted that once you receive the notice, it does not mean that you would not get any notice pertaining to the income of that financial year. The I-T department makes a prima facie check while verifying the ITR, in the future, they can still send you an income tax notice under a different section asking for further information.
Intimation notice under section 143(1) may say three things?
The intimation notice may say three things–there is no additional tax payable by you, there may be additional tax demand notice, there may be an income tax refund.
In the first case, if your income details, tax calculation, the deduction claimed match with the I-T department’s assessments and calculations, then the notice will say there is no additional tax payable by you. Both tax payable and refundable will be shown as zero in this case.
There could be an additional tax demand if the I-T Department finds that you have missed reporting some of the incomes in your ITR or have wrongly calculated the tax due amount or have wrongly claimed a deduction. In such a case, the department sends their assessment of your tax due and will ask you to pay the additional tax due amount.
In the third case, if the department finds that you have paid more tax than what is due, then a tax refund will be shown as due to you and the I-T department will automatically process the refund and you will get the amount credited to your registered bank account within few days. Once, the tax refund amount is credited, the department will simply inform you through SMS that your tax refund has been processed.
The intimation notice is a password-protected file
The password to open the intimation notice is your PAN in lower case and your date of birth. For instance, if your PAN number is ABCDE0000F and date of birth is 02-June-1991, then the password to open the document will be abcde000f02021991.
The first thing that you should do after opening the notice is to check whether your personal details such as name, address, PAN and correct or not. Once these details are checked, you need to match the income tax computation given by you in your ITR with the department’s computation. The intimation notice shows a comparison in a table format of income reported by you in the ITR under each head with the income under that head as computed by the I-T department. Both the columns are displayed side by side so that you can compare it easily.
The intimation notice also shows the details of the tax-saving deductions that are claimed by you in your ITR. If the income and deduction details in both columns match, then your total income after deductions, i.e., net taxable income will also match.
The intimation notice will also show your tax details, interest under sections 234A, 234B, 234C, late filing fees under section 234F and total income tax liability.
In case there is a mismatch in income under a particular head or a deduction amount is wrongly claimed by you or if there is any other arithmetic error, then in such a case, there will be a difference in the taxable income computed by you in the ITR and by the tax department. The taxable income computed by the department can be higher or lower due to which it will either show that you have to pay additional tax or that a refund is due to you.
In case you don’t receive the intimation notice with the stipulated time mentioned above, then it means that the return is not processed by the tax department. In such a case you can file a grivance on the new income tax portal.