Tag: Income tax return 2024-25

The process of filing income tax return (ITR) involves the verification stage, after which the income tax department starts processing the ITR and sends an intimation notice under section 143(1) of the Income-tax Act, 1961 to the taxpayer’s registered email ID and mobile number. The government has revised the time limit for issuing intimation notices, with the current deadline being 9 months from the end of the financial year in which the tax return is furnished. The intimation notice is important as it compares the taxpayer’s income tax calculation with that of the tax department and may show whether additional tax is payable, a tax refund is due, or no further action is needed. The intimation notice is password-protected, and the password is the taxpayer’s PAN in lower case and date of birth. It’s crucial to check personal details, income details, tax-saving deductions, and tax details in the notice. If an intimation notice is not received within the prescribed time, a grievance can be filed on the new income tax portal.

The process of filing income tax return (ITR) does not end at the verification stage. Once an individual has verified his/her tax return, the income tax department starts processing the ITR. After the processing of ITR, the income tax department sends an intimation notice.

This intimation notice is sent under section 143(1) of the Income-tax Act, 1961. The notice is sent on the tax return filer’s registered email ID by the tax department. Further, an SMS will be sent on the filer’s registered mobile number informing the individual that the intimation notice has been sent to the registered email ID.

Chartered Accountant Naveen Wadhwa, DGM, Taxmann.com says, “The government has revised the time limit for issuing of intimation notice by three months effective from April 1, 2021. The intimation notice must be issued within 9 months from the end of the financial year in which the tax return is furnished.”

For FY 2022-23 (AY 2023-24), the last of ITR filing is July 31, 2023. Thus, the last date of issuing intimation notice by the income tax department will be 9 (December 31, 2024) from the end of the financial year in which ITR is filed (March 31, 2024).

It is important that an individual reads this income tax notice. This is because this notice informs you whether the income tax calculation given by you in your ITR matches with that of the tax department as per the information they have.

At the time of processing ITR, the tax department checks for any arithmetical errors, internal inconsistencies, tax and interest calculation and verifies tax payment made etc. Once the ITR is processed, the tax department sends the intimation under section 143(1). However, do keep in mind that at the time of processing of ITR, the tax department makes a prima facie check. In the future, they can still send you an income tax notice under a different section asking for further information.

What to check in intimation notice under section 143(1)?
The intimation notice will state one of the following things:
A) Your income details, deductions claimed, and tax calculations matches with the tax department’s assessments and calculations: In this case the notice will show that there is no additional tax payable by you. Also, both tax payable and refundable will be shown as zero.

B) Additional tax demand notice: There may be a situation where you would have missed reporting a particular income in your income tax return or have wrongly claimed a deduction or calculated your tax incorrectly due to which there is additional tax payable by you. In such a situation, the tax department sends you their assessment and will ask you to pay the additional tax amount along with interest (if any).

C) Income tax refund: In this situation, as per the income tax department’s assessment you have paid additional taxes as compared to your actual tax liability. In such a case income tax refund will be shown as due to you.

What is the password of intimation notice u/s 143(1)
The intimation notice is a password-protected file. To open the notice received by you, the password is your PAN in lower case and your date of birth. For instance, if your PAN number is AAAAA0000A and date of birth is 01-April-1990, then the password to open the document will be aaaaa000a01041990.

How to read intimation tax notice under section 143(1)
Once you have opened the password-protected file, the first thing you should check in the intimation notice is whether your personal details such as name, address, PAN and so on are correct or not.

Once these details are checked, the next step is to read and match the income tax computation given by you in your ITR with the department’s computation. The intimation notice shows a comparison in a table format of income reported by you in the ITR under each head (in one column) with the income under that head as computed by the income tax department (in another column). Both the columns are displayed side by side for ease of comparison.

Along with income details, the intimation notice also shows the details of the tax-saving deductions that are claimed by you in your ITR. If the income and tax-saving details in both columns match, then your total income after deductions, i.e., net taxable income will also match.

The intimation notice will also show your tax details, i.e., tax liability on the net taxable income, tax relief (if any), interest under sections 234A, 234B, 234C, late filing fees under section 234F and total income tax liability.

In case there is a mismatch in income under a particular head or a deduction amount is wrongly claimed by you or if there is any other arithmetic error, then in such a case, there will be a discrepancy in the taxable income computed by the tax department and what you have filed in your ITR. The taxable income computed by the department can be higher or lower due to which it will either show that you have to pay additional tax or that a refund is due to you.

If there is a refund due to you, it would be reflected in the intimation notice as well. However, do keep in mind that the tax department will not send an SMS informing you about the same. Hence, do not fall for SMSs or emails stating that income tax refund is due to you and that you are required to provide your bank details to receive the same; this is a form of fraud, which many taxpayers have fallen prey to.

If there is any income tax refund due to you, then the income tax department will automatically credit it into the bank account nominated by you at the time of filing ITR. The department will only notify you that your income tax refund has been processed without asking for any bank account details.

What if intimation notice is not received within time prescribed
In case your return is not processed by the tax department or is received but intimation notice is not received by you, then you can file a grievance on the new income tax portal.