Once a taxpayer files an income tax return (I-T return), the tax department sends an intimation under Section 143(1) to your registered email address mentioned in your e-filing account to intimate whether the income tax calculation in the ITR filed by you matches that of the tax department based on the records/other sources of information with them.
The notice may also point out a discrepancy that might arise from a lower tax paid than what was meant to be paid.
In case a lower tax is paid, the taxpayer will need to pay the balance amount to resolve the issue. While in case of an excess tax, the tax refund will get disbursed by the department to the assessee’s bank account.
Usually, the intimation notice is a password protected file. In order to open the notice received, 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-Janauary-1990, then the password to open the document will be aaaaa000a01011990.
What is intimation under Section 143(1)?
Individuals need to file income tax returns on or before July 31 of the assessment year. Once the return is filed, the tax department carries out processing of the return.
Upon the receipt of intimation from the department, there are various scenarios that may arise from wrong deduction of TDS from salary and under-reporting of income.
There may be three likely scenarios. The first could be no demand raised for income tax which leaves the assessee free from worries. The second scenario could be that of a tax refund. And the third is that there is a tax demand.
“It is important for the taxpayer to first identify the scenario, and accordingly rectify the computation. For instance, if TDS is not considered by the department, then one can apply for it to be considered — thereby reducing the tax liability. There are, therefore, multiple permutations and combinations and the response will vary from case to case," founder of CA Chauhan & Co Chirag Chauhan was quoted as saying in the publication Mint.
There could be a situation that these changes are not reflected in the tax return by December 31. In such a case the return can be rectified later.
Time period
Even as you may get the notice within a short period of filing of tax return, the maximum time limit of sending this intimation is nine months from the end of financial year in which the return has been file.