Home / Money / Personal Finance /  Know why you shouldn’t ignore 143(1) intimation from tax department

In case you have filed your income tax return (ITR) for the financial year 2019-20 and your tax return has been processed, you must have received an intimation under section 143(1) from the tax department on your mail. This is an intimation from the tax department stating that your return has been processed.

The processing of the tax returns is done by the income-tax department at the Centralized Processing Centre (CPC) in Bengaluru through computerized processing without any human interference. The processing of all income-tax returns involves verification and fixing the errors in relation to tax calculation and tax payments. The income-tax department processes the return to ascertain if any tax or interest is due or refund is due to the taxpayer, which is determined after rectifying the arithmetical error or incorrect claim in the ITR.

Therefore, it is important to check the 143(1) intimations as the tax department will convey the same to the taxpayer through this intimation. It is important to reply to this intimation within particular time limit.

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“The taxpayer can check from the intimation if there is any demand raised (payment due) or any refund receivable from the income tax department. If any demand is raised, the taxpayer should check for issues highlighted in the intimation and submit a response through his income-tax e-filing account by visiting e-proceedings tab or submitting a revised ITR," said Tarun Kumar, Delhi-based chartered accountant.

“Taxpayer should never ignore such intimation as it contains the details for any tax payable by him or any refund due to him after allowing the credit of tax deducted at source, tax collected at source, advance tax, foreign tax credit and self-assessment tax paid. If any adjustment is proposed in income-tax return, the taxpayer has the opportunity to take the necessary action and steps for resolution of such issues within the time provided by the income-tax department," he added.

In case the taxpayer doesn’t respond in time, the tax department may levy interest or penalty.

“If there is some discrepancy between the return filed and intimation received and taxpayer fails to file response within 30 days or fails to pay the tax demand as mentioned in the intimation then the return will be processed after making adjustment(s) u/s 143(1), without providing any further opportunity in this matter. Besides the tax demand, interest, penalty may also be levied. If there is a refund claimed in the return of income, then such refund may be delayed/declined. If the assessee is having any refund in the previous years due to be received from the department, then such refund would automatically be adjusted by the department with tax demand determined in intimation u/s 143(1)," said Kapil Rana, founder and chairman, HostBooks Ltd.

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