All about Income Tax Intimation Notice after ITR Filing

Ashish M. Shaji

22 Jun, 2023

Once an individual has verified their tax return, the income tax department starts processing ITR. Once the ITR is processed, the income tax department sends an intimation notice to them under Section 143 (1) of income tax act 1961. The income tax department sends the intimation notice to the registered email ID of the taxpayer. An SMS is also sent informing the person about the intimation notice sent to the mail ID. Let us discuss more on the Income Tax Intimation notice.

What is Income Tax Intimation Notice?

This notice informs the taxpayer whether the calculation of income tax provided by him in the ITR matches with that of the income tax department based on the information it has.

As stated earlier, once an individual has verified their tax return, the income tax department starts processing ITR. At the time of processing ITR, tax department scrutinizes arithmetical errors, inconsistencies and also checks tax and interest calculations. The department verifies the payment of tax. Once the information provided by the taxpayer is processed, the tax department^[1] sends intimation notice under Section 143(1).

What to do when you receive income tax intimation notice under Section 143(1)?

Firstly check the intimation notice that you have received. The notice will state one of these:

• Income details, deductions claimed, tax calculations

In this, the notice will show that there is no additional tax to be paid by you. Also, tax payable and refundable will be displayed as zero.

• Additional tax demand notice

There could be a scenario wherein you may have missed reporting an income in your income tax return or may have incorrectly claimed a deduction or computed your tax wrongly, due to which you are required to pay additional tax. Therefore, the tax department sends you their assessment and asks you to pay additional tax amount.

• Income Tax Refund

In this scenario, you may have paid more taxes than your actual tax liability, as per the income tax department’s assessment. Therefore income tax refund will be shown due to you.

Reading Intimation Notice

Remember that the intimation notice is a password-protected file. In order to open the notice, the password will be your PAN in lower case and your date of birth. For instance- in case your PAN is AAAAA0000A, and your DOB is 1 Jan 1980, then the password would be aaaaa000a01011980.

When you have opened the password protected file, check that your personal details like your name, address, PAN etc., is correct. When these particulars are checked, the next step involves reading and matching the calculation of income tax provided by you in your ITR with the calculation of the tax department.

The notice shows a comparison in the form of a table regarding the income reported by you in the ITR under each head with the income under that head as calculated by the tax department. Both the column is shown side by side for easy comparison.

Apart from the income details, the intimation notice also displays the details of the tax-saving deductions claimed by you in your ITR. In case where the income and tax-saving details match, then your total income after deductions will also match.

The intimation notice also shows the tax details which means the tax liability on the net taxable income, tax relief, interest under section 234A, 234B, 234C, fee for late filing under Section 234 F and total income tax liability.

If there is any mismatch in the income under a head or if the deduction amount is claimed incorrectly by you or in case there is any other arithmetic error, then there would be a discrepancy in the taxable income calculated by the income tax department with what you have filed. The taxable income calculated by the income tax department may be higher or lower because of which you may have to pay extra tax, or a refund may be due to you.

Income Tax Refund

In case there happens to be an income tax refund due, then it will be reflected in the intimation notice but keep in mind that the income tax department doesn’t send any SMS informing you about it. Therefore if you receive any such mail or SMS where your bank details are also asked, then beware, it can be a form of fraud.

Originally, if there is income tax refund due, then the tax department will credit it to the bank account which was nominated by you at the time of ITR filing. The department notifies about the processing of your income tax refund without asking for your bank account details.

If the return is not processed by the tax department or is received, but the intimation notice is not obtained by you, then you may file a grievance on the new income tax portal.

Conclusion

Beginning from 1^st April, 2021, the income tax department is required to send intimation notice to the taxpayer in 9 months from the end of the financial year in which the ITR is filed. Hence, if a person files Income tax return for Financial Year 2020-21 today, then he must get the intimation notice by 31 December 2022. It is worth mentioning here that tax notices don’t finish with Section 143(1). At the time of processing, only prima facie check is performed by the tax department at the time of processing. The tax department may send a tax notice under other sections for more information.

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