Income tax notice 143(1): read your intimation and respond correctly

Know what the communication actually does

Section 143(1) provides for processing a return through specified adjustments and computation of tax, interest and fees. A document commonly called a notice may actually be the resulting intimation. Its arrival does not, by itself, mean you are accused of concealment or selected for a detailed scrutiny assessment. Read the document heading and statutory reference rather than reacting only to the email subject.

This guide addresses FY 2025-26 and assessment year 2026-27 using the relevant Income-tax Act, 1961 framework. Confirm the assessment year printed on the communication. A demand from an older year should not be reconciled against this year’s salary or tax payments. Save the complete PDF, email, return acknowledgement and the date on which the communication was received.

The outcome can be no demand or refund, a refund, or an amount payable. Even a no-demand intimation deserves a quick comparison with the filed return, especially where losses or credits are important. Conversely, a refund lower than expected may reflect a credit mismatch rather than a conclusion that all your deductions are invalid.

Authenticate before opening links or making payment

Go independently to the official income-tax e-filing portal rather than using an unfamiliar payment link in an email or message. Review the communication through your logged-in account and use the department’s authentication facility where appropriate. Check the PAN, assessment year, document identification details and issue date. A convincing logo or urgent subject line is not proof of authenticity.

Never share your portal password, banking PIN or an OTP with a caller claiming that a refund needs activation. If you use a professional, agree on a secure method of access and retain copies of submissions. The taxpayer should know what response has been filed and what position has been accepted. Delegation is not a reason to lose the documentary trail.

Create a simple chronology: return filing, verification, proposed adjustment if any, final intimation and subsequent demand communications. This sequence helps identify the correct procedural stage. A response intended for a proposed adjustment may not be the correct remedy after processing is complete, and an explanation uploaded in the wrong portal area may not resolve an outstanding demand.

Need help with this? Read our guide to income tax notice reply.

Read the two computations line by line

The intimation generally compares amounts provided by the taxpayer with amounts computed during processing. Start with total income and deductions, then move to tax, rebate, cess, interest, fees and prepaid tax credits. Find the first differing line. If the income figures match but tax credits differ, investigate the credit issue before preparing a lengthy explanation about salary exemptions.

Suppose your return shows total tax of ₹78,000 and TDS of ₹85,000, suggesting a ₹7,000 refund. If processing recognises only ₹65,000 of TDS, the same ₹78,000 tax produces a ₹13,000 demand before any further interest or adjustment. The difference is ₹20,000 of missing credit, not necessarily an additional ₹20,000 of taxable income. These assumed figures illustrate the diagnostic process.

Check whether you entered the correct regime, income category and deduction amount in the actual filed return. A computation worksheet saved on your laptop may differ from the uploaded return. Download the filed form or data and compare it with the intimation. Use the final verified return, not an earlier draft or a tax estimate sent by payroll.

Separate proposed adjustments from a final intimation

Before making specified adjustments under section 143(1)(a), the department must communicate the proposed adjustment and consider the taxpayer’s response. The statutory response period is 30 days from issue of that communication. Use the response facility identified in the authenticated communication and address each proposed item with the relevant evidence and explanation.

Possible processing adjustments include arithmetic errors and incorrect claims apparent from information in the return, together with other specifically permitted items. This is not an unlimited power to decide every disputed factual question through automated processing. An audit-report inconsistency, late-return restriction or inconsistent schedule entry requires its own analysis. Explain why the particular statutory adjustment is or is not justified.

For example, if a proposed disallowance appears to arise from a number transposed between schedules, provide the correct figures and supporting record. Do not simply write that your CA filed the return. Save the submission acknowledgement and attachments. If the response window has expired or processing is complete, examine the final outcome and the next available remedy instead of assuming a late email will reverse it.

Fix TDS and challan mismatches at their source

Reconcile Form 26AS, relevant TDS certificates, tax-payment challans and the credit schedules in the return. AIS can help identify reported information, but it should not be treated as a substitute for checking the actual tax-credit entries. Verify PAN, assessment year, challan particulars and amounts. A payment made under the wrong year can remain unmatched even when the bank account was correctly debited.

Where an employer or other deductor has reported the wrong PAN or omitted a TDS entry, ask that deductor to correct its statement. Keep the certificate, payslips or invoices and proof of deduction. Merely retyping an unsupported credit into another submission may not solve the underlying reporting mismatch. Monitor the corrected credit after the deductor files its correction.

If your tax of ₹25,000 was deposited but the return claims ₹2,500 because of a typing error, the documentary task differs from a case where no credit appears at all. Identify whether the error is in your return, the challan or the deductor’s statement. That diagnosis determines whether reprocessing, tax-credit correction or another procedural request is appropriate.

Choose rectification, revision or appeal deliberately

Section 154 rectification addresses a mistake apparent from the record. The official portal provides options for rectification of processed returns, including relevant tax-credit and reprocessing requests depending on the case. Use the route matching the error and the authority that issued the order. Explain the precise mistake, the record demonstrating it and the corrected result sought.

A revised return, where legally available within the applicable time, is a different mechanism for correcting your return. Rectification is not a universal replacement for revision or a way to introduce every new claim. A dispute requiring interpretation, extensive fact-finding or contested entitlement may need an appeal rather than a simple apparent-error application. Get advice before allowing a remedy deadline to expire.

The general rectification limitation is four years from the end of the financial year in which the order sought to be amended was passed, subject to the law’s operation in the case. Appeals commonly have a 30-day limitation linked to the relevant service event. Do not assume filing a rectification application automatically extends an appeal deadline or stays collection of an existing demand.

Respond to the demand and keep payment separate

Use the portal’s outstanding-demand workflow to indicate agreement, partial agreement or disagreement as appropriate. Explain disputed components and retain evidence of any payment already made. A demand response communicates your position; it does not necessarily amend the underlying intimation by itself. Where correction is required, pursue the corresponding rectification or appellate process as well.

If the computation is correct, pay through the official payment facility using the correct year and demand particulars. Preserve the challan and confirm that the payment is linked. If only part is accepted, calculate that part carefully and avoid inadvertently accepting the entire demand. Ask about the appropriate stay request where a contested demand cannot simply be left unpaid.

A demand under section 156 is generally payable within 30 days of service, subject to statutory exceptions and the particular notice. Do not confuse that payment period with the proposed-adjustment response window. Interest and recovery consequences can continue while a grievance is pending. A helpline complaint or portal ticket is useful for service issues but is not automatically a legal stay.

Track processing limits and close the evidence loop

Section 143(1) generally prohibits sending the intimation after nine months from the end of the financial year in which the return was made. The clock relates to the filing year, not simply the financial year whose income was reported. Check the actual return and intimation dates before asserting that processing was late. Unusual filing histories may require closer examination.

Keep a case folder containing the filed return, computation, Form 26AS, certificates, challans, intimation, responses and acknowledgements. Record the current demand amount and check the portal after any correction order. A successful submission acknowledgement shows receipt of your request; it is not proof that the demand has already been cancelled or the refund approved.

LawLine connects taxpayers with independent professionals for notice review and appropriate representation. Give the adviser the full communication rather than a cropped screenshot showing only the amount. Ask for a short written plan covering the factual mismatch, legal remedy, deadline and collection position. The safest response is a documented, correctly routed explanation, not panic payment or silence.

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