ITR Processing Under Section 143(1): Meaning and Implications
- Asharam Swain
- Dec 3, 2025
- 9 min read
Section 143(1) of the Income Tax Act, 1961, governs how the Income Tax Department verifies and processes income tax returns (ITRs). The assessment is carried out by the Centralised Processing Centre (CPC) through an automated system that checks for errors, mismatches, and inconsistencies between the taxpayer’s declared data and information available with the department. It ensures accuracy in tax computation, deductions, and TDS credits, while also identifying any refund or additional tax payable. This mechanism helps taxpayers receive faster, error-free results and minimises the need for manual scrutiny.
Table of Contents
Understanding Section 143(1) of the Income Tax Act
Section 143(1) of the Income Tax Act deals with the preliminary assessment of an Income Tax Return (ITR) filed by a taxpayer. It is an automated system-driven process carried out by the Centralized Processing Centre (CPC) to verify the correctness of the return. The objective is to ensure that income, deductions, and tax payments declared in the ITR align with the data available from sources such as Form 26AS, AIS, and TDS statements. Based on this verification, the department issues an “Intimation under Section 143(1),” informing the taxpayer about the results of the assessment — whether a refund is due, no change is required, or additional tax needs to be paid.
Step-by-Step Process of ITR Processing Under Section 143(1)
ITR Submission: Once a taxpayer files their ITR, it is automatically sent to the CPC for digital verification.
Automated Cross-Verification: The system compares declared income, deductions, and TDS credits with the data available from Form 26AS, AIS, and TIS.
Computation of Tax: The CPC recalculates taxable income and tax liability based on the verified details.
Identification of Discrepancies: Any mismatches in TDS, income declaration, or deductions are flagged.
Generation of Intimation: Depending on the findings, the CPC issues an intimation under Section 143(1) — showing either no discrepancy, a refund due, or additional tax payable.
Communication to the Taxpayer: The intimation is sent to the registered email address and can also be accessed on the Income Tax e-filing portal.
Possible Outcomes of ITR Processing
After processing, there are generally three outcomes under Section 143(1):
No Change: When the return filed matches the department’s records, confirming that there is no difference in computation.
Refund Due: If excess tax has been paid (through advance tax or TDS), the taxpayer receives a refund directly to their registered bank account.
Demand Payable: If there is a shortfall in tax payment or errors in claimed deductions, the department raises a demand, requiring the taxpayer to pay the difference.
Implications of an Intimation Under Section 143(1)
Receiving an intimation does not necessarily indicate an error. It is a routine communication reflecting the department’s preliminary verification. However, if the computation differs from what was filed, the taxpayer should carefully review the figures and supporting documents. If discrepancies are found, they must be rectified promptly by either paying the demand amount or filing a rectification request under Section 154. Ignoring the intimation could lead to the initiation of further scrutiny proceedings or delayed refunds.
What Happens If No Intimation is Received?
If no intimation under Section 143(1) is received within nine months from the end of the financial year in which the return was filed, it is deemed that the return has been processed without any adjustment. This means the department has accepted the return as filed. However, taxpayers should still regularly check the e-filing portal and email notifications to ensure they do not miss any official communication.
Amendments Introduced in the Finance Act 2025
The Finance Act 2025 introduced digital enhancements to make the Section 143(1) process faster and more transparent. The system now integrates with AIS for real-time verification and immediate mismatch detection. Additionally, timelines for issuing intimations have been made stricter to ensure faster refunds and smoother compliance. The act also mandates that any adjustment made under Section 143(1) must be communicated clearly with a computation summary, allowing taxpayers to understand the exact reason for changes.
Common Reasons for Receiving Intimation Under Section 143(1)
Intimation under Section 143(1) is a communication from the Income Tax Department after processing your Income Tax Return (ITR). It summarizes the tax calculations made by the department compared to those reported by the taxpayer. Receiving an intimation does not always mean there is an error or demand — it could also confirm that the return has been processed correctly. However, there are several common reasons why a taxpayer may receive an intimation notice highlighting discrepancies or adjustments.
One of the most frequent reasons is a mismatch between the income reported in the ITR and the data available in the Annual Information Statement (AIS) or Form 26AS. These statements contain details of income, TDS, and financial transactions reported by employers, banks, and other entities. If the income shown in the return is less than what appears in these statements, the system automatically flags it for adjustment.
Incorrect TDS or advance tax details are another common cause. Sometimes, taxpayers may enter wrong TAN numbers, claim excess TDS, or forget to include certain tax credits reflected in Form 26AS. Such discrepancies result in mismatches between the tax paid and the tax claimed, prompting the department to issue an intimation with a revised computation.
Disallowed deductions or exemptions can also trigger an intimation. For instance, if an employee claims HRA or deductions under Section 80C or 80D without proper eligibility or documentation, the system may disallow the amount. This often leads to a higher tax liability being computed by the department compared to the taxpayer’s self-assessment.
Typographical or data-entry errors, such as incorrect income figures, wrong section codes, or misplaced decimals, can alter the total income or tax calculation. Even minor mistakes, like entering the wrong bank account details or skipping a mandatory field, can lead to differences detected during automated processing.
Omission of certain income sources is another key reason. Many taxpayers forget to report interest from savings accounts, fixed deposits, dividends, or capital gains from mutual funds and shares. The department cross-verifies such income using AIS data, and any unreported income leads to a mismatch and subsequent intimation.
Lastly, failure to verify the return within the prescribed period — generally 30 days from the date of filing — results in the ITR being treated as invalid. In such cases, the system may send an intimation notifying that the return was not processed due to lack of verification.
To avoid receiving such notices, taxpayers should ensure accurate reporting of all income, match TDS details with Form 26AS, verify the return on time, and use trusted platforms like TaxBuddy for error-free filing. Proper validation before submission helps prevent unnecessary intimations and ensures smooth processing of tax returns.
How to Respond to an Intimation Under Section 143(1)
Review the Intimation Carefully: Download the intimation from the e-filing portal and compare it with your filed ITR.
Check the Computation: Identify discrepancies in income, TDS, or deductions.
Pay the Demand (if any): If the department’s computation is correct, pay the balance tax using challan ITNS 280.
File a Rectification Request: If the taxpayer disagrees with the computation, they can file a rectification request under Section 154 with supporting documents.
Track the Status: Regularly monitor the status of rectification or refund on the portal.
Role of Accurate Bank Account and KYC Details
Accurate bank and KYC details are essential for receiving refunds and avoiding delays. If incorrect details are provided, refunds may fail or get redirected. The bank account must be pre-validated and linked with PAN and Aadhaar. Updated contact details, including email and mobile number, ensure that the taxpayer receives all communications related to their ITR processing and refund status promptly.
How TaxBuddy Simplifies ITR Processing and Compliance
TaxBuddy makes ITR processing effortless by offering AI-driven error detection and expert review before filing. It automatically reconciles income data from AIS, TIS, and Form 26AS, ensuring that all figures are accurate and consistent. In case of an intimation under Section 143(1), TaxBuddy’s experts help analyse the notice, compute the difference, and guide on whether to pay the demand or file a rectification request. This ensures a seamless and compliant experience for every taxpayer.
Conclusion
Section 143(1) ensures transparency and accountability in tax return processing. It verifies the correctness of filed returns and provides an opportunity for taxpayers to rectify mismatches before further scrutiny. To avoid issues and ensure timely refunds, taxpayers should file accurate returns, maintain valid documentation, and monitor their ITR status regularly.
For anyone looking for assistance in tax filing or resolving an intimation under Section 143(1), it is highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. What is an intimation under Section 143(1)? An intimation under Section 143(1) is an official summary from the Income Tax Department after the preliminary assessment of your filed return. It compares your computation of income, deductions, and taxes paid with the department’s database. The intimation specifies whether your filing results in a refund, a tax payable, or no discrepancy. It acts as confirmation that your ITR has been processed and helps identify any differences between your declared income and the system’s calculations.
Q2. How long does it take to receive an intimation? The intimation is usually sent within a few weeks to a few months after the ITR is filed and verified. However, the Income Tax Department is required by law to issue the intimation within nine months from the end of the financial year in which the return was filed. For instance, if an ITR was filed for FY 2024–25, the intimation must be issued by December 31, 2026.
Q3. What should be done if a refund is shown in the intimation? If the intimation confirms a refund, it means your tax liability is lower than the total tax paid. The refund will be credited directly to your registered and pre-validated bank account mentioned in your ITR. Ensure that your account is linked to your PAN and validated on the income tax e-filing portal. If you notice an incorrect or delayed refund, it’s advisable to check refund status on the portal or through the TaxBuddy dashboard for updates.
Q4. Can an intimation show both refund and demand? Yes, in certain cases, an intimation may show partial adjustments where a refund amount is reduced due to minor mismatches in reported income, deductions, or TDS entries. This results in a smaller refund or an additional payable amount. Such cases often occur due to mismatched data in Form 26AS or AIS. Reviewing your income details carefully before filing helps avoid these discrepancies.
Q5. What happens if the tax demand shown is incorrect? If you believe the tax demand or computation in the intimation is incorrect, you can file a rectification request under Section 154 through the income tax e-filing portal. In this request, provide corrected figures with necessary supporting documents such as TDS certificates or revised calculations. TaxBuddy can help file such rectifications quickly, ensuring that any genuine mismatch is resolved with minimal delay.
Q6. Is it mandatory to respond to all intimations? No, not all intimations require a response. If the intimation states “No Demand, No Refund” or shows a refund that has already been credited, no further action is needed. However, if it shows a demand or mismatch in data, you should verify the cause and take corrective action immediately. Ignoring intimations with tax demand may lead to additional interest and penalties.
Q7. What if no intimation is received at all? If no intimation is received within nine months from the end of the financial year in which the ITR was filed, it is deemed that your return has been accepted as filed. This means there were no discrepancies or additional tax liabilities. Still, it’s advisable to keep a copy of your acknowledgment and stay alert for any updates or future communications.
Q8. Does the intimation under Section 143(1) mean scrutiny? No, an intimation under Section 143(1) is not a scrutiny notice. It is a computer-generated communication that confirms preliminary processing of your return. A scrutiny or detailed assessment, which involves verification of documents and claims, is issued separately under Section 143(2). Therefore, receiving an intimation under Section 143(1) is a routine part of the tax process, not a reason for concern.
Q9. How can TaxBuddy assist with intimation notices? TaxBuddy simplifies the process of handling intimation notices by analyzing the data mismatch, computing the correct liability or refund, and preparing rectification filings when needed. The platform provides expert review to ensure all calculations and documentation are accurate. This prevents unnecessary penalties or repeat notices and helps taxpayers respond promptly and confidently.
Q10. What are common reasons for receiving incorrect demands? Incorrect tax demands may occur due to mismatches in TDS data, unverified returns, incorrect bank details, or differences between AIS and the filed return. At times, clerical errors or system mismatches also trigger such notices. Filing through a reliable, AI-supported platform like TaxBuddy helps prevent these issues by ensuring real-time validation of income, deductions, and tax credits.
Q11. Can a taxpayer ignore an intimation under Section 143(1)? Ignoring an intimation, especially one indicating a tax demand, is not advisable. Delay in addressing it may lead to accumulation of interest, adjustment of future refunds, or further legal notices. Always open and read every intimation received via email or the e-filing portal. If unsure about how to respond, seek professional help through TaxBuddy’s expert support to handle it correctly.
Q12. How can one check the intimation status online?
You can check the status of your intimation by logging into the income tax e-filing portal. Navigate to the “e-File” section, select “View Filed Returns,” and choose the relevant assessment year. From there, you can view or download the intimation under Section 143(1). TaxBuddy users can also track their ITR status directly within their account, where updates and rectification options are displayed in real time.
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