Intimation under Section 143(1) of Income Tax Act

Section 143(1) of the Income Tax Act, 1961, refers to an automated communication from the income tax department. It highlights any errors in your income tax return and informs you if any interest or additional tax is payable.

All income tax returns are first processed electronically by the Centralised Processing Centre (CPC). This stage involves checking for any inconsistencies, errors, or mismatches. Once the return is verified and processed, an intimation is issued to the taxpayer under Section 143(1), detailing any refund due or additional tax liability.

If you've received an intimation under this section, there's no need to panic. It is a routine part of the return assessment process. Make sure to review it carefully. If you require assistance, you may seek help from a tax expert or your financial advisor.

What is Intimation under Section 143(1)?

After a return is filed, either voluntarily under Section 139 or upon request under Section 142(1), it undergoes a process known as assessment.

This preliminary check is carried out by the income tax department through a fully automated system at the CPC. The system scans for arithmetical mistakes, inconsistencies in declared income, miscalculations of tax, or mismatch in tax payment details.

Once the analysis is complete, the CPC issues an intimation under Section 143(1). This document simply highlights any glaring errors found and compares the taxpayer's declared information against the records maintained by the department.

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When does one receive an intimation u/s 143(1)?

You will receive an intimation under Section 143(1) once your return is successfully processed by the system. This processing includes checks against department records and arithmetical accuracy of your filed return.

The Centralised Processing Centre verifies all details (like income declared, tax deducted, deductions claimed, and tax paid) and compares them against departmental data and provisions of the Income Tax Act. The system then auto-generates an intimation that outlines any errors or mismatches, if present.

If your return shows excess tax paid, the intimation includes details of the refund (issued only if it exceeds Rs. 100). On the other hand, if there is a shortfall in payment, it shows the demand raised and includes a challan to make the payment.

If no discrepancy is found, the intimation acts as a confirmation that the return filed matches the department’s records. It’s not something to be alarmed about—it’s just a system-generated update on your return status.

Centralised Processing Center

With rising volumes of income tax returns, manual and jurisdiction-based assessment systems led to delays and inefficiencies. To solve this, the Finance Act, 2008 empowered the CBDT to create a system for centralised processing.

As a result, the CPC in Bangalore was established to handle returns—both e-filed and paper-based—without any direct interaction between the taxpayer and the assessing officer. This made processing faster and more streamlined, removing jurisdictional delays. The CPC system is fully automated and works in a jurisdiction-free environment.

The CPC’s key benefit to taxpayers is the quick and hassle-free processing of income tax returns. Since the system handles basic checks like calculation errors or mismatches automatically, it saves time for both the department and taxpayers.

Section 143(1) intimation, issued through this process, is not a notice or demand in most cases; it’s just a record of how your return has been processed. It often reassures taxpayers that their return has been accepted, or, if required, indicates any corrections or adjustments needed.

Don’t be alarmed if you receive this document; it is standard and sent to almost every filer.

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Preliminary assessment Under 143(1)

Once you file your tax return, it is automatically processed by the CPC system. Here’s how the initial check works:

• The system compares the data you submitted with the data available with the Income Tax Department (from sources like Form 26AS, TDS returns, and bank-reported transactions).

• The return is recomputed based on department records, and a side-by-side comparison is generated.

• The intimation document has two columns:

  • As declared in the return

  • As calculated under Section 143(1)

Key components checked include:

• Income under different heads (salary, business, capital gains, etc.)

• Gross total income

• Deductions under Chapter VIA (like 80C, 80D)

• Taxes paid, including TDS, advance tax, and self-assessment tax

Next, the CPC applies necessary adjustments, and final tax liability or refund is computed. These adjustments are communicated to the taxpayer via email or the e-filing portal.

If you respond to the notice within 30 days, your reply is considered before finalising the return. Otherwise, the system proceeds with the adjustments as initially proposed.

Types of intimation:

• No demand/ no refund: No discrepancies; your return is accepted as is.

• Intimation with demand: Tax mismatch; additional payment required.

• Intimation with refund: Excess tax paid; refund due.

Refunds are credited to your account, and any final demand must be paid using the appropriate challan. The system removes manual handling, ensuring transparency and speed.

Nature of adjustments under 143(1) Section of Income Tax Act

While processing your return, CPC may make the following changes to determine your correct income:

• Maths or calculation errors in the return.

• Inconsistent claims: If any figures do not match, such as declaring income under one head but claiming deductions elsewhere.

• Incorrect claims: For example, claiming deductions not supported by data in Form 26AS or other reports.

• Disallowance of loss carry-forward: If previous losses are claimed in the return but the earlier return was not filed within due date, such claims may be rejected.

• Expenditure not reported in return: If your audit report mentions expenses that are not included in the return, those could be disallowed.

Each adjustment is mentioned in the intimation sent to the taxpayer.

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Time limit for issue of 143(1)

The income tax department is required to send an intimation under Section 143(1) within nine months from the end of the financial year in which the return is filed.

For example, if you file your return for FY 2023–24 in July 2024, the intimation can be sent anytime up to 31 December 2025.

If you do not receive any intimation within this period, it means there are no changes or adjustments, and the original acknowledgment of your return acts as a confirmation that your return was accepted.

Action to be taken by the taxpayer after receiving a 143(1)

Here’s how to respond to a Section 143(1) intimation:

• Verify your details: Make sure the PAN, name, assessment year, and return acknowledgement number match your filing.

• Understand the differences: Compare your return figures with those shown in the intimation.

• If mistakes were made: You can revise your return by logging into the e-filing portal and submitting a revised return.

• If you disagree with the adjustments: File a rectification request under Section 154(1) to point out the errors in the intimation.

• Respond on the portal: If the intimation raises a tax demand, log in to the portal and submit your response—agreeing or disagreeing.

• Still not satisfied? Contact your Assessing Officer or raise a grievance online. You can also write to the Income Tax Ombudsman.

• If you agree with the tax demand: Use OLTAS challan with code 400 (Tax on regular assessment) to make the payment online.

Always respond within the timeline mentioned in the notice to avoid issues.

Process of Intimation under Section 143(1)

The process of intimation under Section 143(1) involves several steps:

1. Submission of income tax return: The taxpayer submits their income tax return for the relevant assessment year, detailing their income, deductions, and tax liability.
2. Preliminary assessment: The Income Tax Department conducts a preliminary assessment of the return. This involves checking for arithmetical errors, internal inconsistencies, and incorrect claims.
3. Adjustments: If any discrepancies are found, adjustments are made. These adjustments can pertain to:
   • Arithmetical errors.
   • Incorrect claims of deductions.
   • Mismatches between the income reported and the information available with the department (e.g., TDS details).
4. Generation of intimation: Based on the preliminary assessment, the department generates an intimation. This document indicates:
   • The total income or loss as per the return.
   • Adjustments made during the assessment.
   • The amount of tax or interest payable by the taxpayer, or the refund due.
5. Communication to taxpayer: The intimation is communicated to the taxpayer via email or through the online portal. It is essential for taxpayers to review this intimation carefully to ensure accuracy.

Types of Intimation under Section 143(1)

There are three possible outcomes of an intimation under Section 143(1):

1. No adjustments: If the preliminary assessment matches the return filed, no adjustments are made. The intimation confirms that the return is accepted as is.
2. Tax refund: If the taxpayer has paid more tax than required, the intimation will show the amount refundable.
3. Tax demand: If the preliminary assessment reveals that additional tax is payable, the intimation will show the amount due along with interest, if applicable.

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Addressing discrepancies

Upon receiving an intimation under Section 143(1), taxpayers should:

1. Verify the details: Check the details mentioned in the intimation against the original return filed.
2. Respond promptly: If there are discrepancies, respond promptly by filing a rectification request under Section 154 to correct any errors.
3. Make payment: If there is an additional tax demand, make the payment within the stipulated time to avoid penalties.
   

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What is the password for intimation u/s 143(1)?

Intimation sent under Section 143(1) is password-protected. The password is a combination of your PAN (in lowercase) and your date of birth in DDMMYYYY format, with no space.

For instance, if your PAN is ABCDE1234Z and your date of birth is 15 September 1995, the password will be: abcde1234z15091995.

This ensures your sensitive financial information remains secure.

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