The Government of India has mandated for individuals who have a specified amount of annual income to file for an Income Tax Return and within a stipulated time period. Income Tax Return is a form in which a taxpayer provides information regarding his earnings and tax liabilities to the Income Tax Department.
Why do you need to file Income Tax Return?
If any of the below- mentioned conditions are applicable to you, and then you will need to file an Income Tax Return.
- Let us represent the gross annual income criterion for filing Income Tax Return in a tabular format.
For individuals who are below 60 years
Gross Annual Income is more than Rs.2.5 lakhs
For those individuals who are above 60 years and below 80 years
Gross Annual Income is more than Rs.3 lakhs
For those individuals who are above 80 years of age
Gross Annual Income is more than Rs. 5 lakhs
- If you have paid more amount as tax than you are liable to pay and you want a tax refund then you should file an Income Tax Return.
- If you have more than single source of income like property on rent or income from capital gain etc., then you ought to file for an Income Tax Return.
- Suppose, you have invested in foreign assets or have earned from foreign assets during that particular Financial Year then you will have to file for ITR.
- If the taxpayer is a company or a firm then, it needs to file for Income Tax Return.
E-filing of ITR and Intimation Orders
Filing for Income Tax returns can be done via electronic medium i.e. online method by visiting the web portal of the Income Tax Department. This process of filing Income Tax Return is known as e-filing. After the e-filing process has been completed by a taxpayer; the Income Tax Department will process the Income Tax Return request.
During the processing of the request, there might be scenarios where the Income Tax Department might find certain discrepancies in data, errors in calculations, document verification, wrong entry of certain data, etc. In such cases, the Income Tax Department will issue a notice for the taxpayer otherwise known as Intimation Order.
Intimation u/s 143(1) (a)
Many taxpayers have received notice under section 143(1)(a) after filing their Income-tax returns for AY 2017-18 or AY 2018-19.
Now, it is important to understand that notice under section 143(1) and 143(1)(a) are two different notices and the way of dealing them is also different. So, one should not get confused between the two.
A taxpayer will receive intimation under Section 143(1) if any one of the below- mentioned circumstances prevails.
- If an assessee had paid extra amount for taxation and ought to receive refund from the Income Tax Department, then he will receive intimation with refund amount specified on the intimation order. If the refund amount is more than Rs. 100 then only it will be executed by the Income Tax Department otherwise it will not be executed.
- Suppose, the assessee has paid less amount than the actual amount he is liable to pay then the Income Tax Department would send intimation notice with the amount to be paid mentioned on the notice.
After the analysis of Intimation u/s 143(1), it is clear that there is a validation or comparison of records in which there are two columns i.e. ‘As provided by taxpayer in Return of Income’ and ‘As computed under Section 143(1)’.
The result obtained after comparison are classified into 3 categories i.e.
- No demand No refund
According to this category, there have been certain adjustments made which were mentioned in Intimation u/s 143(1). After these adjustments, there is no demand from the Income Tax Department nor does it owe any refund to the assessee.
- Demand determined
Here in this case, after making certain adjustments by the Income Tax Department it is seen that there needs to be some more additional payment of tax by the assessee. There can be a situation in which the assessee may agree, disagree or even decide for raising a revised Income Tax Return request.
- Refund determined
In this case, it is seen that there needs to be payment of some refund amount to the assessee. This amount can be sent to the assessee by the mailing address or be deposited into the bank account details of which were shared earlier.
In order to understand what is notice u/s 143(1) and step by step guidance to deal with it, Click here.
What is notice under section 143(1)(a)?
Notice u/s 143(1)(a) is an intimation from the Central Processing Centre (CPC) seeking clarification of the mismatch between the Income and deduction when compared to Form 16, Form 16A or Form 26AS.
What is the time period for sending a response towards this notice?
A time period of 30 days from the date of receiving the intimation is given to the recipient of the notice. If the recipient fails to respond, the return is processed after making necessary adjustment(s) u/s 143(1)(a), without providing any further opportunities in this matter.
Who receives intimation u/s 143(1) (a)?
Communication is usually sent for an adjustment to be made under Section 143(1)(a) to those taxpayers where there seems to be a mismatch between income or deductions or exemptions mentioned in the Income Tax Return and those income or deductions or exemptions mentioned in Form 16.
These types of mismatches usually occur in those cases where the employee has not informed the employer about the claims and goes on claiming these deductions or exemptions himself. The Income Tax Department will definitely ask for certain proofs for claiming these deductions and will send communication for making adjustments under Section 143(1) (a).
How to deal with the notice under section 143(1)(a)?
Take a look at the page 2 of the notice received. This page will help you understand the reason why this notice is issued to you and you can know the exact difference.
In the example case given above, the reason of difference is that the assessee has not declared his “Other Income” of Rs.451868 in his return, whereas this income is being displayed either in his Form 26AS or Form-16 or Form-16A.
It is important to note that the details entered in the Income-tax return should match with Form-16, Form-26AS and Form-16A, if any.
The second reason of difference in the given case is of Deductions u/s Chapter VIA. If you have claimed some deductions which are not included in your form 16, then also, you may receive this notice.
After understanding the difference, take the required action as below (this is basis above example case which is most common one. Some cases may differ and its required action).
- Declare the Other Income in the revised return and,
- Regarding deductions, if you have the proofs of deductions, then simply attach the same while responding to this notice (steps explained below). However, if you do not have the deduction proofs, then you cannot claim those deductions which are not displayed or not considered in your Form-16.
Procedure to Respond for notice u/s 143(1)(a)
Log in to Income-tax Department website www.incometaxindiaefiling.gov.in
Go to ‘e-Proceeding’ menu option and further choose ‘e-Assessment/Proceedings’ as shown below:
After clicking on “e-Proceeding”, you will see a screen as given below. Click on 'Prima Facie Adjustment u/s 143(1)(a)'.
By the Finance Act, 2016 there had been certain changes into Section 143(1) where the scope of Prime facie adjustments u/s 143(1) (a) have been increased. Furthermore, there are four clauses which have been added to make the adjustments.
> Disallowance of deductions that have been claimed under Sections 10AA, 80 IB, 80IC, 80ID, etc. when the returns were furnished after the dates specified under Section 139(1).
> Disallowance of loss claimed if the return for previous year for which loss is being adjusted was furnished after due dates mentioned in Section 139(1).
> Disallowance of certain expenditures which are indicated in audit report but are not considered while calculating the total income in the Income Tax return.
> Adding up of income which was appearing in Form 26AS, Form 16A or Form 16 and has not been included while calculating the total income in the Income Tax Return.
After that, the following screen will be displayed. Click on Reference ID.
You will see the response screen as shown below:
Now you have to select whether you ‘Agree’ or ‘Disagree’ with the adjustments in the notice and accordingly you have to select the same from the Drop-down.
If you Agree for addition, you will have to make the relevant adjustments and modifications in the return and revise it and also pay the additional tax amount, if any. (How to file a revised return).
If you Disagree with the adjustments, you will find a box open up, where you will have to enter the reason for disagreement and also attach supporting documents before you submit your response.
You need to enter:
- TAN - This is the TAN of the employer which is available in Form-16 / Form16-A / 26AS copy.
- Deduction made under section - You need to enter section 192, if you have made a deduction against Salary Income. If deduction is not made under Salary Income, you can directly enter the section of deduction claimed.
- Amount paid/credited by deductor - Check your Part-A of Form-16 to find this amount.
- Income / Gross Receipt as per return - Enter the Income after taking the deductions into account.
- Head of Income / Schedule under which reported in the return - Enter the relevant head of Income in question here.
- Reason - While selecting the reason, you will see a list as shown below. Select the relevant reason from the drop-down. Select the reason diligently.
Justification Remarks - You can mention any specific remarks regarding your Income or deductions in question in this column. Once you have entered these details, you need to attach the supporting proofs relating to discrepancy addressed, for eg- 80C, 80D proofs, rent receipts, etc.
Lastly, just click on “Submit” button and an ‘Acknowledgement’ of your response being submitted shall be displayed.
Do not forget to revise the return if you have agreed to the adjustments in the notice. (Read How to file a revised return).
What is the time limit to submit the response in this case?
You must submit the response within 30 days of issue of such intimation.
Important Note - Sometimes, filing of response to the notice of Income-tax Department may become a tedious task for the Assessee (tax payer). Therefore we have started a new service for our users called Notice Assistance where our tax experts will help to resolve the notice received by you in the best possible way.
How to find if Intimation u/s 143(1) (a) is correct?
In order to confirm that the details mentioned in Intimation u/s 143(1) (a) are correct, you can request the Income Tax Department for resending the intimation again.
For this, you will simply need to visit the e-filing website and enter your details such as PAN, Assessment Year, Category, CPC Reference Number, etc. You can select the ‘Request Type’ as ‘New Request’ and ‘Request Category’ as ‘Intimation u/s 143(1)154/16(1)/35’. Finally, you need to click on the ‘Submit’ button.
Hence, if your deductions or exemptions mentioned in your Form 16, Form 16A or Form 26AS do not match with that of your deductions mentioned while filing ITR; then you are likely to receive intimation u/s 143(1)(a). You need to respond to the intimation within stipulated time along with providing relevant supporting documents.
- What happens if I do not respond to the intimation within 30 days of receiving the intimation?
If you do not respond to the intimation within 30 days, your Income tax return would be processed by making the necessary adjustments.
- By when can I revise my Income Tax Return request?
If you have opted for revised return, then you must complete it within 15 days.
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