What Is Income Tax Intimation Section 143(1)? What To Do When You Receive It?

Several people often receive emails or SMS that suggest that their “ITR has been processed under section 143(1)”.   

The Income Tax department sends this to taxpayers who are eligible to receive this message. All the taxpayers who pay their ITR are eligible to receive this notice.

However, only a few of them actually understand the true meaning of the notice. It generally serves as the first step after the completion of the filing of Income Tax Returns.

The Income Tax Department uses the notice to conduct a preliminary check. This notice aims to verify whether the details entered in the return match the data in the Income Tax Department’s systems. 

In this article, we will try to learn the true meaning of the Income tax intimation section 143(1). We will break the article part by part in simple words. 

Hence, this will allow people with zero knowledge of income tax to learn and understand everything clearly. 

What Is Intimation Under Section 143(1) Of The Income-tax Act, 1961?

Section 143 (1) of the Income-tax Act, 1961, generally deals with the processing of income tax returns filed by taxpayers.   

People often think their work is complete right after filing their ITR. However, the process does not get completed immediately. 

The Income Tax Department generally conducts a thorough check to eliminate all the mistakes under the Income Tax intimation section 143(1). 

Hence, this works as a soft verification or a summary sheet verification of the return filed by the individual. 

This draws a clear comparison between the data and information in the ITR and in the tax department’s records. Some of these examples are (Form 26AS, AIS, TIS, and others) 

What Makes Section 143(1) So Important?

Section 143(1) plays a crucial role in determining whether the income tax department accepts the return as filed or whether there are discrepancies that the person needs to address. 

Section 143(1) Return Can Lead To  

• Refund when the taxpayer ends up paying more than what is required. 
• The user often receives a demand notice when the Income Tax Department believes the taxpayer owes a larger amount of Tax to the government.  
• The concerned person can also get another difference / no refunds intimation. Hence, this simply means that there are no discrepancies.  

The data in the system and the data filed in the ITR absolutely match. Hence, there is no need to be worried about anything at all.  

What Details Does The Income Tax Department Check Under Section 143 (1)? 

The Income Tax department conducts a mathematical and factual check under section 143(1). The income tax department does not conduct a full-fledged audit or scrutiny. 

Section 143(2) generally allows for a full-fledged scrutiny of the taxpayer.  

What are the things that Section 143(2) verifies?  

• Mathematical errors in the returns: This happens when the taxpayer adds incorrect information. 
• Internal inconsistencies: This generally happens when there is a mismatch between the information filed in the ITR and the information available with the department. 
• Computation Mistakes in Taxation: These can happen for several reasons. For example, the taxpayer often applies the wrong tax rate. 
• A Mismatch between Form 26AS/AIS/TIS. This happens in certain situations.  

Some examples are when TDS claims do not match the data that is available with the Income Tax Department. 

• Section 143 verifies exemptions and deductions exceeding the statutory limits.  

For example, this can happen in a situation where a person claims ₹3.5 lakh under Section 80C instead of claiming ₹2.5lakh. 

• Wrongly claimed assets that are set off. 

• They also cross-check the actual cross-check records against the advanced tax/TDS/TCS credit. 

These checks are generally automated. Hence, they generally do not happen manually. The Centralized Processing Center in Bangaluru does all the automated checks. 

What Happens After The Completion Of The ITR Verification? 

The income tax department sends the taxpayer an Income tax intimation under section 143(1) once the entire automated processing is done.  

Moreover, there are generally three columns in this document.  

Moreover, based on the above-mentioned factors, the outcome should arise. 

1. No Change: In this case, there is generally no change required. This happens when the Income Tax department accepts the ITR due to the lack of discrepancies. 
2. When people pay excess tax, they generally receive a refund, which is credited to their bank account at 6% p.a. interest. 
3. Demand: The department should issue a notice for the balance amount when it finds that tax has been short-paid.  

How To Check The Section 143(1) Intimation? 

People generally receive an email and an SMS from the Income Tax Department when their ITR is processed. 

In the subject line, you will find  

“Intimation under Section 143(1)of the Income Tax Act for PAN XXXXXXXX and Assessment Year YYYY-YY.” 

Taxpayers can also download it manually.  

1. Step 1. Log in to https://www.incometax.gov.in 
2. Step 2. Navigate to Income Tax Return, then move to View Filed Returns.  
3. Step 3. Move to ‘View Details’ and click on the link attached to it. 
4. Step 4. Click Download Intimation u/s 143 (1) located under the “Acknowledgement and ITR-V / Intimation Order” tab. 
5. The portal sends you a PDF protected by a password. The password has to be your PAN number in small letters. Apart from that, you will also have to add your date of birth in the DDMMYYYY pattern. 

For example, when the PAN number is ABCDE1234F and the date of birth is 07.08.2000, the password will be abcde1234f07082000. 

You will find the entire procedure in both Hindi and English. 

What Should We Do After Receiving The Section 143(1) Intimation? 

Receiving an email from the Income Tax intimation section 143(1) is not uncommon. Moreover, you should not panic when you receive an email of this sort.  

Receiving an email about the Income tax intimation section 143(1)  does not always mean a problem. You should follow certain steps to avoid consequences. 

1. Read Things Carefully

You should go to the PDF and then go through the “comparison table.” Over there, you should be able to compare the returned income and the processed income.  

2. Go Through The Major Differences

You should match both columns. When both columns match, it means things are absolutely perfect. Thus, this will not require any further actions or rectifications. 

3. What To Do When There Is A Mismatch? 

The processed income or tax liability often differs from what people had filed. Hence, you should always cross-check the Form 26AS and AIS/TIS for all the income that got unreported or the TDS that was missed. 

Taxpayers often overclaim deductions and exemptions. Hence, you should also verify the deductions and exemptions. Thus, this mismatch can often come from rounding errors. 

4. You Should Always Verify, Whenever A Demand Gets Raised 

You should verify the difference when the intimation shows the amount is payable. After verification, if you find the amount correct, you should use Challan 280 to pay the amount. 

Also, you can always submit an online response and request reprocessing when you disagree with what was given.  

5. Tracking The Refund Properly

When a refund is due, it gets processed automatically to the pre-validated bank account that is linked with PAN. 

You should verify your account on the portal. This will help to avoid failures during the process of refund. 

Additional Reading:

1. Section 142(1) Income Tax Notice: How To Respond To It?
2. What Is Mutual Fund Overlap? How To Prevent It From Happening?
3. Income Tax Notices for Salaried Individuals: Dos and Don’ts to Stay Compliant