How to read income tax intimation notice under section 143(1)?

It can be both intimidating and freeing to file your income tax return (ITR). Intimidating because the income tax process and having your papers in order might take some time, and freeing because you filed before the deadline and won’t have to worry about it for another year. The Income Tax Department will give you an intimation under section 143 of the Income Tax Act once your ITR documentation has been processed, letting you know if you owe any additional tax or if you are due a refund. However, understanding the intimation sent under section 143 (1) is not always straightforward. Here’s how to read the intimation notice and figure out what it means.

How will I receive the notice?

The letter will be sent to your registered e-mail address by the IRS. When you e-file your returns, you utilize your registered e-mail address.

What will the notice contain?

If the figures in your filed ITR match the tax department’s data, you’ll receive the notice. One of the following three things could be said:

1. Your earnings, tax calculations, claimed deductions, and other information all match the department’s assessments. This indicates you have no outstanding taxes to pay and the government owes you no refund.
2. It’s also possible that the notice is an additional tax demand notice. This occurs if the department’s computations reveal that you failed to report a source of income while filing your ITR or claimed a deduction incorrectly. The inaccuracies may be entirely mathematical, and you still owe the IRS money. A tax demand will be included at the bottom of this notice.
3. An income tax refund notification is the third form of notice you could get. You’ll get this if you’ve paid more taxes than you should have, in which case the department will repay you.

How can I read the Intimation notice under Section 143 of the Income Tax Act?

To read Intimation notice under Section 143 of the Income Tax Act, follow these steps:

1. The e-mail notification you get will be a password-protected file. Your password will be your PAN followed by your date of birth in lowercase.
2. After then, double-check that the notice’s personal information is right. Particular attention should be paid to the name, PAN, and address.
3. After you’ve double-checked that all of the facts are right, compare your income tax computation to the department. The notification will give you a table in which the calculations you gave will be displayed alongside their computations. The table will include information about your earnings as well as any tax-saving deductions you’ve claimed. It will also indicate your tax liability, any tax relief you’ve claimed under sections 234A, 234B, and 234C, as well as any late filing costs you may be obliged to pay or have already paid under section 234F. You’ll discover a disparity in your ITR and the department’s calculations if there’s an arithmetic error or an erroneous deduction claimed. You’ll then see if you owe any further taxes or if you’re due a refund.

How will I get the refund?

If you are due a refund, the funds will be deposited immediately into your bank account. The Income Tax Department will tell you once this is completed.

When can I expect to receive the notice?

Don’t worry if you filed your taxes last month and haven’t received a notice yet. The Income Tax Department has a year from the end of the financial year in which you filed to process your returns, according to existing laws. With an example, we can better comprehend the chronology. You should have filed your returns for the fiscal year 2018-2019 by August 31, 2019. The fiscal year in which you filed your tax return is 2019-2020. That means the department has until March 31, 2021, to process your taxes and issue you a Section 143 notice (1).

One of the following two things may have happened if the deadline of March 31, 2021, passed without you receiving any notification:

1. Your ITR may have been processed correctly, but there was a problem issuing the notification. It’s conceivable that the e-mail address was entered improperly or that a system has malfunctioned. If this is the case, you can use the e-filing system to file a service request for the notice under Section 143 (1).
2. It’s also conceivable that some papers went missing and the department failed to process your ITR. If your documentation hasn’t been handled, you can use the e-filing system to make a complaint with the department.

Is it necessary to respond to the notice?

You have 30 days to react after receiving the notice under Section 143 of the Income Tax Act. You can also check your online account on the e-filing website if you can’t find the notification in your e-mail or SMS. There should be a record of the notice there.

If the intimation also includes a notice of demand, you will be expected to pay any additional tax owed within the time frame specified in the notice. If you miss the deadline, you may be subject to one of two penalties:

1. You shall be charged interest at the rate of 1% per month for each month you postpone payment under section 220.
2. The assessing officer will impose a penalty on you under section 221. The penalty should not exceed the amount of the pending tax that you are obligated to pay.

Individuals were formerly expected to physically present themselves at the Income Tax office on the day and hour specified after getting the intimation notice. However, thanks to technological advancements, it is now feasible to get the notice and pay any outstanding dues online.