intimation-under-section-143 (1)
intimation-under-section-143 (1)

Intimation received under Section 143(1) of Income Tax Act

Every Indian Citizen needs to file Income Tax Return if there annual income is more than the specified Income Tax Exemption Limit and other situations specified by Income Tax Act as mentioned below:

In any of the following situations (as per the Income Tax Act), you must file an Income Tax Return in India:

  1. Your gross total income (before allowing any deductions under section 80C to 80U) exceeds Rs 2.5 lakhs in FY 2020-21. This limit is Rs 3 lakh for senior citizens (aged above 60 but less than 80) or Rs 5 lakhs for super senior citizens (aged above 80).
  2. You are a company or a firm irrespective of whether you have income or loss during the financial year.
  3. You want to claim an income tax refund.
  4. You want to carry forward a loss under a head of income.
  5. Return filing is mandatory if you are a Resident individual and have an asset or financial interest in an entity located outside of India. (Not applicable to NRIs or RNORs).
  6. If you are a Resident and a signing authority in a foreign account. (Not applicable to NRIs or RNORs).
  7. You are required to file an income tax return when you are in receipt of income derived from property held under a trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust.
  8. If you are a foreign company taking treaty benefits on transactions in India.
  9. Proof of return filing may also be required when applying for a loan or a visa.

Post filling of Income Tax Return under Section 139(1), the Income-tax department carries out an assessment on all the returns filed and tell the taxpayer, the result of that assessment as per the provisions mentioned in section 143(1) of Income-tax Act, 1961. This kind of assessment is complete done with help of computers and do not have any kind of human interventions and is delegated to Centralized Processing Center (CPC).

When the taxpayer files his returns, his total income or loss are recomputed by the CPC by comparing the ITR with records available with Income-tax department and any mismatch is recorded in the provide data by arithmetic calculation.
An intimation letter is generated which have two columns. One depicts the values as provided by the taxpayer in his return and second depicts the values as computed by CPC under section 143(1). There are four major categories under this comparison –
   a. taxpayers income under various heads
   b. taxpayers Gross Total Income
   c. His tax deductions as per Chapter-ViA (80C, 80D, etc.)
  d. His tax deductions at the source and tax payments as done by the taxpayer in form of advance tax and self-assessment tax.
Then appropriate adjustments are made to income and taxpayer final tax liability or refund is calculated. Taxpayer received an email with PDF attachment containing intimation under section 143(1).
Types of Intimation which assessee receives post filling Income Tax Return under Section 143(1) of Income-tax Act 1961:
Intimation with No Demand & No Refund

This generally takes place when returns filed by the taxpayer is accepted as it is without carrying out any kind of adjustment. This intimation informs assessee than filled Income Tax Return has been processed and there is no Demand or Refund from Income Tax Department to Assessee.

Intimation determining demand 

This kind of adjustments are made under Section143(1) when discrepancy is found in the return and tax liability is arrived. Post filling of Income Tax Return, it get processed as per the provisions of Income Tax Act and assessee gets demand order under Section 143(1) if there arise any tax liability as per Income Tax Department

Intimation determining refund 

This kind of intimation is issued when the interest or tax is to be refunded to taxpayer. This may happen with two scenarios, one, where the return filed is found without any discrepancy or the adjustments are made under section 143(1) which results in refund, the credits are given to the taxpayer for his refund claimed and interest must be paid on such refund. Refunds are automatically transferred to taxpayer’s account while demand notice wait for taxpayer to fulfil his tax liability.

Different Kinds of Adjustments that are done under Section 143(1) of Income-tax Act 1961:
• Any kind of arithmetic error as found in returns.
• Any kind of incorrect claim that is found from the information as provided by the taxpayer in his return when compared to information records with the Income-tax department.
• Any kind of disallowance of set off loss which is found in that financial year is carried forward from the previous year while return is being filed beyond the due date.
• Any kind of disallowance of expenditures which are indicated in the audit report however is not indicated in the returns form.
The intimation under section 143(1) must be sent within one year of filing the tax returns that is by 31st March of that assessment year.
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