Types of Adjustments Under Section 143(1)

When the Income Tax Department reviews a tax return, they may make adjustments based on what they find. Here are the common types of adjustments:

1. Calculation Mistakes: If you made any math errors in your tax return, the department will correct those. This could include wrong calculations for income or tax owed.
2. Disallowed Claims: If you claimed deductions (like those for investments or health insurance) that aren’t allowed, the department will remove those claims from your return.
3. TDS Mismatches:
   • Tax Deducted at Source (TDS): If the amount of TDS you reported doesn’t match what your employer or banks have reported, the department may adjust your TDS credit. This could mean you owe more tax if they find you reported less.
   • Tax Collected at Source (TCS): Similar adjustments can happen if there are discrepancies in TCS.
4. Unreported Income: If you didn’t report some income, the department will add that to your total income, which may increase your tax bill.
5. Loss Claims: If you claimed business losses that don’t meet the rules for being carried forward, those losses may be adjusted or removed.
6. Incorrect Taxpayer Status: If you filled out your status incorrectly (like whether you are a resident or non-resident), the department may adjust your tax calculations based on the correct status.
7. Filing Rules: If you were supposed to file additional returns and didn’t, the department may add penalties or increase your tax liability.
8. Refund Adjustments: If you are owed a tax refund but have outstanding tax dues, the refund may be reduced or set off against what you owe.

Key Points to Remember

• Automated Process: Most adjustments are done automatically without detailed checking.
• Notification: You will receive a notice explaining the changes made to your return.
• Disagreement: If you don’t agree with the adjustments, you can respond or appeal through the proper channels.

How to reply to the intimation notice of Section 143(1)

1. If You Agree with the Notice

If you agree with the changes made by the Income Tax Department:

• No Tax Due: You don’t need to do anything. Just keep the notice for your records.
• Refund: The refund will be processed automatically. Make sure your bank details are correct.
• Tax Due: If you owe additional tax, you need to pay it.

Steps to Pay the Tax:

1. Log in to the Income Tax e-Filing portal.
2. Go to “Response to Outstanding Demand” under the e-File section.
3. Pay the tax using the available options on the portal.

2. If You Disagree with the Notice

If you think there’s a mistake in the notice, such as wrong deductions or TDS mismatch, you can raise an objection.

Steps to Disagree:

1. Log in to the Income Tax e-Filing Portal: Go to the portal and log in with your PAN and password.
2. Go to the Response Section: Click on “Response to Outstanding Demand” under the e-File section.
3. Disagree with the Notice: Choose the option to disagree and explain why (e.g., incorrect TDS, wrong deduction disallowed).
4. Attach Documents: Upload any necessary documents (like Form 16, proof of deductions, etc.).
5. Submit Your Response: Review everything and submit your response.

3. Wait for a Follow-up

After submitting your response, the Income Tax Department will review it. They may ask for more information, or the issue could be resolved.

What is the password for intimation under Section 143(1)?

The password to open an intimation notice under Section 143(1) is a combination of your PAN and your date of birth or date of incorporation (for businesses). The format is as follows:

Password Format

• PAN (in lowercase) followed by your date of birth (for individuals) or date of incorporation (for companies) in DDMMYYYY format.

Example:

If your PAN is ABCDE1234F and your date of birth is 11th April 1991, then the password will be: abcde1234f11041991