An intimation under Section 143(1) seeks to correct any mistakes that are apparent from records without the need for the taxpayer to submit additional data.
Income Tax Return 2019: If you have filed your income tax return for FY 2018-19 within the due date (August 31, 2019 for individuals) and verified the same using one of the prescribed modes, you may expect an e-mail from the Income Tax Department (Central Processing Centre (CPC)) with an intimation under Section 143(1) to the email ID, as per the tax department’s records.
An intimation under Section 143(1) seeks to correct any mistakes that are apparent from records without the need for the taxpayer to submit additional data. The mistake could be on account of:
i) any arithmetical error
ii) an incorrect deduction/exemption claim
iii) disallowance of loss claimed, if return of previous years was furnished after the due date to file the original return
iv) income appearing in Form 26AS or Form 16A or Form 16 which has been missed
v) the credit of taxes and levy of interest
vi) sum payable or refund due to the assessee determined after adjustments of tax deducted at source, any tax collected at source, any advance tax paid, any relief under an agreement under Section 90 or 90A, or any relief allowable under Section 91 etc
The total income would be recomputed post correction of errors and taxes with interest would be recomputed.
Actions to be taken on receipt of intimation under Section 143(1)
Once you receive the intimation, it is ideal to review basic details such as name, PAN, assessment year, e-filing acknowledgement number to ensure that it is a valid intimation pertaining to your tax records.
The intimation reflects a comparison in two columns, namely “As Provided by Taxpayer in Return of Income” and “As Computed under Section 143(1)”. Hence, the next step is to verify the income and deductions reported in the two columns along with the tax liability, tax reliefs (if any), interest, late filing fee etc. In most cases, the reasons for differences would be mismatch of tax withholding details or tax details, omission of the income as per 26AS, incorrect claim for relief etc.
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An intimation under Section 143(1) may accept the return filed by you in which case there are no adjustments and the tax return filed by you has been accepted by the CPC. In such a case, no further action is necessary.
Alternatively, the intimation may be with some adjustments to the income and taxes where there are discrepancies in the tax return filed. Your previous outstanding demands may be adjusted against the refund due to you. If such adjustments are justified and acceptable to you, then you would need to pay the additional tax demand online. Post payment of taxes, log into your account on the tax portal and submit the appropriate response in the ‘outstanding demand’ section. It is ideal to check post a fortnight on whether the demand has been cleared from the account and there is no pending action for you.
In case you identify any mistakes while reviewing the 143(1) intimation, an online rectification can be made by logging into your account through the tax portal. In such a case, select the ‘rectification request’ section in the portal and put in the appropriate assessment year. The portal would throw up a series of reasons why you prefer rectification. Select the option most appropriate for you and upload the corrected xml on the website. It is advisable to check the portal after a month to check whether the request has been accepted and the change is effected.
Even in case the demand is partially correct, the same approach can be used.
CPC would also send a fresh 143(1) intimation once the revised return is filed or once the online rectification is accepted/rejected.
Transfer of cases to jurisdictional Assessing Officer (AO)
The CPC typically transfers the tax returns to the AO which involve complexities and where returns cannot be processed without having more information/documents. In such cases, the AO may send a notice under section 143(2) requesting details to verify the tax returns by conducting a limited or complete scrutiny (based on the facts of each case).
In recent times, the CPC is mapping the details from various sources such as e-TDS returns filed by employer or other tax deductors (banks, tenants etc). Hence, ideally taxpayers should validate the tax return and 143(1) with Form 26AS, Form 16 or Form 16A etc before filing.
(By Aarti Raote, Partner, Deloitte India; and Robin Bose, Tax Senior II with Deloitte Haskins and Sells LLP)