AFTER FILING THE income tax return (ITR), taxpayers receive the intimation under Section 143(1), which confirms acceptance, refund, or raises a demand due to discrepancies. The demand must be paid within 30 days to avoid interest. If it appears incorrect, a rectification request must be filed.
The income tax (I-T) department compares the information furnished by the taxpayer with the data available in its records, including TDS, advance tax, self-assessment tax and other reported income. Taxpayers should carefully review the intimation by verifying the total income considered, TDS and tax credits, deductions and exemptions allowed, interest calculations and the final refund or tax demand. If everything matches the return filed and tax records, no further action is required. However, any mismatch should be examined immediately to determine whether corrective action is needed.
Identify reason for discrepancy
If the taxpayer disagrees with the adjustments or tax demand mentioned in the Section 143(1) intimation, the first step is to identify the reason for the discrepancy. Common causes include incorrect TDS reporting, omission of income, mismatch in tax payments or clerical errors.
Manish Garg, partner, Tax, AKM Global, says taxpayers can respond through the I-T department’s e-filing portal by submitting an online response to the outstanding demand, filing a rectification request under Section 154 where there is an apparent mistake, or filing a revised or updated return wherever permitted under the law. “If the tax demand is found to be correct, it should be paid promptly and the payment details should be updated on the portal,” he adds.
Timeline for rectification
Where a tax demand is raised through a Section 143(1) intimation, taxpayers are required to pay the demand within 30 days from the date of service of the notice, unless a different timeline is specifically mentioned. In case any mismatch is flagged by the tax department, the taxpayer is allowed 15-30 days to furnish his response.
Failure to pay a valid demand can result in continued levy of interest on the outstanding amount, adjustment of future tax refunds against the demand and recovery proceedings.
Defective ITR notice
A notice under Section 139(9) is issued when the department considers the return to be defective. This does not necessarily mean that the return is incorrect, but that certain mandatory information or documents are missing or inconsistent.
Neeraj Agarwala, senior partner, Nangia & Company, says common reasons for this notice are either incorrect ITR or incomplete ITR. “The notice specifies the defect and provides the taxpayer an opportunity to rectify it by submitting a corrected return through the e-filing portal,” he says. If the defect is not rectified within the prescribed time, the return is treated as invalid and it is deemed that the taxpayer has not filed the return at all.
Inquiry, scrutiny notice
An inquiry notice under Section 142(1) is issued either to request filing of a return if not already filed, or to seek additional information to verify details in a filed return. A notice under Section 143(2) indicates that the return has been selected for detailed scrutiny. Upon receiving a notice, taxpayers should respond within the stipulated timeline. Ignoring such notices can result in best judgement assessment, additional tax demands, penalties and prolonged litigation.
Disclaimer: This article is for informational purposes only and should not be construed as tax, legal, or investment advice. Tax rules, disclosure schemes, and government notifications, including FAST-DS 2026, are subject to change based on official gazette notifications. Readers are advised to consult a qualified tax professional or chartered accountant and refer to official Income Tax Department communications before making any compliance or disclosure decisions.
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