After filing an income tax return, many taxpayers receive a communication from the Income Tax Department titled “Intimation under Section 143(1).” For first-time filers and even regular taxpayers, this intimation often causes confusion and concern. Some assume it is a notice or a sign of scrutiny, while others are unsure how to respond. In reality, an intimation under Section 143(1) is a routine communication that informs the taxpayer about the preliminary processing of their return.
This article explains the meaning, purpose, contents, types, and implications of an intimation under Section 143(1) in a clear and practical manner.
Introduction
Submission of an income tax return is not a closure of the tax compliance process. When a return has been received, it is handled by the Income Tax Department on an automated system. Under this processing, the department gives intimation, under Section 143(1) of the Income Tax Act, 1961.
Most taxpayers get terrified with such intimation and assume that it is either a tax notice or an order of assessment. Section 143(1) intimation is, however, mostly a computer-generated message that is intended to inform the taxpayer of any variation in the returned information and the information that the department has received. Being aware of this provision will assist taxpayers in reacting accordingly in order to eliminate unwarranted stress.
What is Intimation under Section 143(1)?
In Section 143(1), an intimation is a communication that is made by the Income Tax Department upon the processing of the income tax return. It contrasts the information which has been reported by the taxpayer with the information provided in the records of the department, like the TDS details, advance tax payments and other disclosures.
The purpose of this intimation is not to conduct a detailed scrutiny but to highlight arithmetic errors, incorrect claims, or mismatches that are apparent from the return itself.
Nature of Section 143(1) Intimation
An intimation under Section 143(1) is not a notice and not an assessment order. It is merely an outcome of the preliminary processing of the return.
It may result in:
- acceptance of the return as filed,
- a demand for additional tax, or
- a refund to the taxpayer.
The communication is usually sent electronically to the registered email ID and is also available on the income tax portal.
Time Limit for Issuing Intimation
The Income Tax Department can issue an intimation under Section 143(1) within nine months from the end of the financial year in which the return is filed.
If no intimation is received within this period, it is generally assumed that the return has been accepted as filed.
What Does Section 143(1) Processing Include?
While processing a return under Section 143(1), the department may make adjustments for:
- arithmetical errors in the return,
- incorrect claims are apparent from the return,
- mismatch in income reported and income reflected in Form 26AS or AIS,
- disallowance of certain deductions if conditions are not fulfilled,
- incorrect carry-forward of losses.
No detailed investigation or verification of documents is carried out at this stage.
Types of Intimation Under Section 143(1)
1. Intimation Showing No Demand or Refund
In many cases, the intimation simply confirms that the return has been processed without any change. This means the department agrees with the income and tax declared by the taxpayer.
2. Intimation Showing Tax Demand
If the system identifies short payment of tax, incorrect deduction claims, or mismatches in TDS, an intimation showing tax demand is issued. The taxpayer is required to pay the demand within the specified time to avoid interest and recovery proceedings.
3. Intimation Showing Refund
If excess tax has been paid, the intimation will reflect a refund amount, which is usually credited to the taxpayer’s bank account after processing.
Difference Between Section 143(1) and Section 143(2)
It is important not to confuse Section 143(1) with Section 143(2).
Section 143(1) deals with automated processing of returns, while Section 143(2) is a notice issued for scrutiny assessment, where the department examines the return in detail and may call for documents and explanations.
Receiving an intimation under Section 143(1) does not mean that scrutiny proceedings have begun.
What Should a Taxpayer Do After Receiving Intimation?
After receiving the intimation, the taxpayer should carefully verify:
- income details,
- deductions claimed,
- tax paid and TDS credit,
- demand or refund amount shown.
If the intimation matches the return filed, no action is required.
If a demand is raised due to an error or mismatch, the taxpayer may either pay the demand or file a rectification request if the demand is incorrect.
Rectification of Intimation Under Section 143(1)
If the taxpayer disagrees with the adjustments made, a rectification application under Section 154 can be filed online. Rectification is commonly used in cases of:
- incorrect TDS credit,
- data mismatch,
- computational errors.
Proper supporting documents should be kept for future reference.
Common Reasons for Receiving a Tax Demand
Tax demands under Section 143(1) often arise due to:
- non-reporting of interest income,
- mismatch between Form 26AS/AIS and return,
- incorrect deduction claims,
- delay in linking PAN with Aadhaar,
- errors in advance tax or self-assessment tax reporting.
Most of these issues can be resolved through timely verification and rectification.
Importance of Section 143(1) Intimation
The intimation under Section 143(1) acts as an early checkpoint in the tax filing process. It helps:
- identify errors at an initial stage,
- reduce future disputes,
- ensure accuracy in tax records.
Ignoring an incorrect demand may lead to interest, penalty, or adjustment of future refunds.
Conclusion
A taxpayer receives an informal notice of assessment under Section 143(1) of the Income Tax Act as part of their regular tax obligation. The informal notice of assessment does not cause confusion; instead, it gives taxpayers an opportunity to identify any mistakes or omissions before filing their tax return. After learning about how this informal notice of assessment procedure works, a taxpayer can respond effectively and proactively fulfil their tax obligations and avoid future issues with their tax return. Taxpayers will have greater confidence and comprehension of their tax obligations if they know about this formalised process of informal notification under Section 143(1).
