After you file your Income Tax Return (ITR), the Income Tax Department verifies your calculations and payments. They may find that you owe further taxes. Or you may even be eligible for a tax refund. The authorities then send a notice under Section 143(1) of the Income Tax Act, 1961. It informs you about the results of their preliminary assessments. This intimation reflects any disparity between your ITR and the tax department’s records.
If you find your income tax notice confusing, here’s a guide to help you understand what you need to do.
How can you view the notice sent under Section 143(1)?
The Income Tax Department will send the intimation to the email id registered under your e-filing account. The steps you need to follow to open and view the contents of the notice include:
Entering the password:
The notice will be a password-protected file. The password is your PAN, followed by your birth date. But you must enter your PAN in the lowercase.
For example, if your PAN is XXXXX1234A and your date of birth is 31 October 1982, then your password is xyzab1234d31101982.
Confirming the accuracy of your personal details:
Once you open the notification, you must verify if the details given in the intimation are accurate. Check the spelling of your name, your PAN, and your address.
Reviewing the calculations:
The notice will show the following data:
Your income details as reported in your ITR
Information about your tax-saving investments
Deductions and reliefs you claimed
Tax deducted at source (TDS)
Your final tax liability
Income tax you paid
Late fines you owe or paid, if any
The intimation presents the details you provided in your ITR and the figures calculated by the income tax department side-by-side. The information is arranged as two columns in a table.
If you notice any dissimilarity between the two columns, check the calculations in your ITR. Then go through the computations in the notice as well.
What information can you get from the notice?
The notice could reflect either of three intimations:
No dues: If the details in your ITR match the tax department’s assessments, you don’t have any pending income tax.
Tax demand: You might have made any mistake in claiming a deduction. Or you might have failed to report the correct income amount under the taxable income categories. There could be errors in the arithmetic as well. In such cases, you will see discrepancies between the taxable income in your ITR and the amount stated in the notice. Then the message will carry a tax demand.
Tax refund status: You might have also paid more tax than was due from you. Then the income tax notice will reflect the amount of return for which you might be eligible.
What to do if you notice any mismatch?
If the amount provided by the tax department is higher than the sum in your ITR, you will need to pay more income tax. You must clear the dues within the deadline given in the notice to avoid penalties.
However, if your amount is larger than that in the notice, you can expect a tax refund. The tax cell will automatically transfer the refund amount to your bank account.
If you disagree with the adjustments to your ITR details the tax authorities made, you must respond within 30 days. You can file a rectification application online.
If you receive an income tax notice, there is no cause to panic. You can rectify errors and resolve the problem, if any, without any hassle.