Pagar Khata -Staff Payroll & Attendance Management
Section 143(1) of the Income Tax Act provides the computation of an assessee's total income after making the adjustments. An assessee is an individual responsible for paying tax or sum of money under the Income Tax Act 1961. The adjustments are any arithmetic errors in the returned data and an incorrect claim if it's obvious from the information in return.
All taxpayers' income tax returns are first processed online at the Centralised Processing Centre. Following the Income Tax return processing, the income tax department sends intimation to the taxpayers under section 143(1) Income Tax informing them of the results. The taxpayers need to do assessments for this.
a. If the assessee fails to respond to a notice from the department requiring them to produce certain information or books of accounts.
b. If they fail to cooperate with a special audit ordered by the Income Tax authorities.
c. The assessee fails to file the return by the deadline or within the extended time limit permitted.
d. The assessee fails to follow the terms in the Summary Assessment notice.
After hearing the assessee's argument, the assessing officer issues an order based on all relevant materials and evidence available to them. This is known as the assessment of best judgement.
a. The assessee has taxable income but has yet to file his tax return.
b. The assessee is found to have understated his income or claimed excessive allowances or deductions after filing his income tax return.
c. The assessee has not produced the required international transaction reports. Some taxpayers may complete the assessment quickly, while others take a long time. It is recommended that you hire a Chartered Accountant for assistance when dealing with income tax officers if you are facing troubles.
An income tax declaration can be submitted either on request by the income tax department under Section 139 or on request by Section 142(1).
It is essential to understand what happens when the taxpayer has filed their return on income tax:
There are a few reasons due to which an intimation under Section 143(1) Income Tax act is generated:
The Central Processing Centre (CPC) automates the initial return processing entirely. The Intimation in section 143(1) of Income Tax act is also a record generated by the computer. In each tax report by CPC, they validate data from information available in the records of the income tax department, such as the collection of the banks, Form 16, TDS returns, among others. This notice generally indicates obvious errors that the mainframe system has identified.
Upon the filing of Income Tax returns, the computerised system recalculates total or profit/loss revenues based on the records of the Income Tax department. It compares them with the taxpayer's information. Revenue tax Intimation (u/s 143(1)) is divided in the Return of Income (RRI) and Section 143 columns as provided by the taxpayer (1). For major categories like income in various categories, gross total income etc., there is a comparison.
Tax deducted is categorised under advance tax and self-assessment tax at source and tax payments by the taxpayer. Suitable adjustments to income are made in accordance with Section 143(1) of the Income Tax Regulation, and the final refund is calculated. Adjustments shall be made only when the taxpayer is notified of the proposed adjustments in the form of the written or electronic email address provided in the income tax return filed.
Responses received from taxpayers within 30 days of the intimation's issue date will be considered before making the final adjustment. If no response is received within such a period, the initial adjustments will be denied. After calculating the final tax returns, it is adjusted for TDS and tax payments, as well as any other relief under Section 90/91. Under this section, tax relief is possible if tax is paid on double-taxed income outside India or Tax payable on double-taxed income under Income Tax Act. An intimation must be prepared and delivered to the assessee.
Intimation with no demand or refund- This usually occurs when the department accepts the return as filed without making any changes.
Demand determination for intimation measures- Adjustments are made by Section 143(1) of Income Tax based on discovery and a calculation of tax liability.
Refunding intimation- This is issued where any interest or tax has been found to have been refundable. This is either because there has been no discrepancy in the return previously filed or because the adjustments provided for in paragraph 143(1) have been made where taxes and interest are credited to taxpayers.
If a demand notice is issued in final tax liability, any refunds will be given to the taxpayer.
This revised report must be filed before the end of the assessment year in question or before completing the assessment, whatever happens first. The revised return may be submitted at or before the end of the evaluation year on or before 31 March. However, the last day to revise your return is if the income tax department completes the evaluation before that date.
You can also revise Income tax returns that were filed late. It should be noted that the deadline for filing the belated return is the same as the deadline for filing revised returns at the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.
If you file your tax return on time, there is no limit to how many times you can revise it. However, use this option sparingly because multiple revisions may result in Income Tax Department scrutiny, which may result in tax notices to substantiate your income and a delay in processing your returns.
Also Read: TDS On Salary Under Section 192
The information provided in Sec 143(1) of Income Tax Act shall be transmitted within one year from the end of the fiscal year of the filing of the report. If a taxpayer did not receive any notification within this period, this means that the taxpayer's tax return has not been adjusted, and no change has occurred in respect of the tax refund.
To err is human, but it is essential to rectify these errors as early as possible. Suppose the Income Tax Department discovers an error in your IT return. In that case, it may be treated as income concealment, and you may face a penalty in addition to interest for delaying tax payment. As a result, it is critical to revise your return as soon as you discover any errors in the original return. Pay the self-assessment tax if the revision results in additional tax payable. In the event of a refund, you will be notified following the Income Tax u/s 143(1) in due course.
1. Is an intimation under Section 143 (1) a levy order?
Intimation under Section 143(1) is an intimation, not an assessment order. It is an automated response sent by the department following a preliminary review of the taxpayer's return.
2. Can I submit a revised return per Section 143(1) upon notification?
Yes, of course, you can. A taxpayer may file a revised return before the intimation is generated. The same can be achieved by visiting the website of the income tax department.
3. I have got a demand notice regarding Section 143(1) requiring me to pay some amount. What am I supposed to do?
If the taxpayer agrees with the tax demand, they can pay the remaining tax. If the taxpayer disagrees with the department's adjustments, they can file a correction under section 154. If a taxpayer is not satisfied with processing a rectification filed under section 154, they may file an online grievance by contacting the assessing officer.
4. What if I did not receive my intimation under section 143(1) Income Tax even after the above mentioned period has expired?
The acknowledgement of the return shall be identified as the intimation in a case where no sum is payable by, or refundable to, the assessee and would be considered where no adjustment has been made.
Pagar Khata -Staff Payroll & Attendance Management