Intimation under section 143(1): what it means and how to respond
Almost every return filed in India produces an intimation under section 143(1). Most of them are harmless — a two-column computation sheet confirming what you already declared. The one you must not ignore is the communication that arrives *before* it, proposing an adjustment under section 143(1)(a), because that carries a hard 30-day clock.
What a section 143(1) intimation actually is
Every return you file is processed electronically at the Centralised Processing Centre in Bengaluru. Nobody reads it. A system compares the figures you have entered against the figures the department already holds — TDS and TCS reported by deductors, advance tax and self-assessment tax challans, audit report data, and the previous year's return — and recomputes your tax. The output of that exercise is an intimation under section 143(1) of the Income-tax Act, 1961, now section 270(1) of the Income-tax Act, 2025.
The intimation is laid out in two columns: "as provided by taxpayer in return of income" and "as computed under section 143(1)". If the two columns match, the intimation is simply a receipt. If they differ, the difference produces either a refund or a demand.
There are effectively three outcomes. The first is no variation at all — your return is accepted as filed. The second is a refund, which is credited to the pre-validated bank account, usually with interest for the period from the start of the tax year (or the date of filing, if you filed late) to the date the refund is granted. The third is a demand, which is accompanied by a notice of demand under section 156 of the 1961 Act, now section 289 of the 2025 Act, payable within 30 days.
An intimation showing a refund is not a problem. It is the system agreeing with you. Clients regularly forward these to us in a panic because the subject line says "Intimation under section 143(1)". Read the last row before you worry.
The distinction that matters: 143(1) intimation versus 143(1)(a) proposed adjustment
These are two different documents and taxpayers conflate them constantly.
A proposed adjustment is a communication issued before processing is finalised. Under the 1961 Act it arose from the first proviso to section 143(1)(a); under the 2025 Act it is section 270(2), which requires that "a communication is to be given to the assessee of such adjustments either in writing or in electronic mode" and gives you 30 days to respond. It is not a demand. Nothing has been decided. The system has spotted something — a deduction that does not reconcile, a loss it proposes to disallow, an audit-report figure you have not carried into the computation — and it is telling you what it intends to do.
If you do not respond within 30 days, the law permits the adjustment to be made anyway. That is the trap. The 30-day window is your cheapest opportunity to fix the year: no appeal fee, no rectification queue, no interest running while you argue.
An intimation under section 143(1) is the finished processing order. It is appealable to the Commissioner (Appeals) and rectifiable. But by the time it lands, the adjustment has already been made and, if it produced a demand, interest has already been computed on it.
In short: the 143(1)(a) communication is a question. The 143(1) intimation is an answer. Answer the question while you can.
The statutory position under the 2025 Act
The Income-tax Act, 2025 came into force on 1 April 2026 and repealed the 1961 Act. The provisions were renumbered but not, in this area, substantially rewritten. Where we have been able to verify the new number we give it; where we have not, we say so rather than guess.
| Provision under the 1961 Act | Corresponding provision, Income-tax Act, 2025 |
|---|---|
| 143(1) — processing and intimation | 270(1) |
| First proviso to 143(1)(a) — proposed adjustment, 30 days | 270(2) |
| Second proviso to 143(1) — nine-month processing limit | 270(4) |
| 143(2) — scrutiny notice | 270(8) |
| 143(3) — assessment order | 270(10) |
| 144 — best-judgement assessment | 271 |
| 154 — rectification of mistake | 287 |
| 156 — notice of demand | 289 |
| 234A / 234B / 234C — interest | 423 / 424 / 425 |
| 234F — fee for late return | 428 |
| 270A — under-reporting penalty | 439 |
| 139 — return of income | 263 |
| 245 — adjustment of refund against demand | The corresponding provision of the 2025 Act (we have not been able to verify the renumbering) |
Time limits: the department's and yours
| Event | Limit |
|---|---|
| Department may send an intimation under 270(1) | Up to nine months from the end of the financial year in which the return is made — section 270(4) |
| You must reply to a proposed adjustment | 30 days from the communication — section 270(2) |
| You must pay a demand raised by the intimation | 30 days from the notice of demand under section 289 |
| You may file a rectification application | Four years from the end of the financial year in which the order was passed |
| Department must dispose of a rectification application | Six months from the end of the month of receipt — section 287(9) |
| You may appeal to the Commissioner (Appeals) | 30 days from service of the intimation |
If no intimation is sent within nine months, the acknowledgement of your return stands as the intimation and the return is treated as accepted for processing purposes. That is not the same as immunity from scrutiny.
What actually triggers an adjustment
The heads of adjustment permitted at processing are narrow: arithmetical errors, incorrect claims apparent from information in the return, disallowance of a loss carried forward where the earlier year's return was filed late, disallowance of expenditure or an increase in income indicated in the audit report but not taken into account in the computation, and disallowance of specified deductions where the return itself is late. Section 270(5) defines what an "incorrect claim" is.
In practice, these are the reconciliation failures that generate the communications we see.
| What went wrong | How it surfaces |
|---|---|
| TDS claimed exceeds TDS in Form 26AS | Credit restricted to 26AS; demand equal to the shortfall |
| Income appears in AIS but not in the return — interest from a savings or fixed deposit, dividend, rent, sale of securities | Flagged as an inconsistency; TDS credit may also be denied because the corresponding income is not offered |
| Deduction claimed under Chapter VI-A without the return supporting it — 80C, 80D, 80G donation without the donee's reporting | Proposed disallowance |
| HRA claimed but salary structure or employer reporting does not support it; landlord PAN missing where annual rent exceeds ₹1,00,000 | Proposed disallowance of the exemption |
| Deductions claimed while filing under the default regime, without validly opting out | Straight disallowance |
| Audit report figure not carried into the computation | Increase in income under the audit-report head |
| Capital gains from mutual fund or share sales reported in AIS but not in Schedule CG | Inconsistency, often followed by scrutiny selection |
| F&O income reported in the speculative business schedule instead of as normal business income | Turnover and set-off mismatches; frequently ends as a defective return instead |
| Loss carried forward from a year in which the return was belated | Loss disallowed |
| Advance tax or self-assessment challan with the wrong assessment year or wrong PAN | Tax treated as unpaid; demand plus interest |
| Foreign assets or foreign income not disclosed in Schedule FA | Not adjusted at processing, but routed to scrutiny and to Black Money Act consequences |
The single most common cause remains the simplest: the taxpayer filed from Form 16 alone and never opened the Annual Information Statement.
How to respond on the e-filing portal
Everything happens after login at incometax.gov.in.
To read the document, go to Pending Actions > e-Proceedings, select Self, and locate the entry described as Prima Facie Adjustment u/s 143(1)(a). Click View Notice, then Notice/Letter pdf to download it. To reply, click Submit Response. For each line item you select Agree or Disagree. If you agree, the adjustment stands and you should be ready to pay the resulting tax. If you disagree, you must give a reason and attach evidence — each attachment is capped at 5 MB. Tick the declaration and submit; the portal returns a Transaction ID. Keep it.
To read the final intimation, go to e-File > Income Tax Returns > View Filed Returns, open the relevant year and download the intimation order from the list of downloads available there.
If the intimation has produced a demand you accept, or one you want to contest, go to Dashboard > Pending Actions > Response to Outstanding Demand. The portal offers Demand is Correct — after which disagreement is no longer possible, so be sure — or Disagree with the demand (Either in full or in Part). If you have already paid, you enter the challan identification number.
To check what the department believes your income was, use e-File > Income Tax Returns > View AIS, or the Annual Information Statement (AIS) menu on the dashboard, then Proceed. Within the AIS portal you can open any transaction, click the Optional button in the Feedback column, choose the appropriate feedback option and submit; an acknowledgement receipt is generated. Correcting the AIS does not correct your return, and correcting your return does not correct the AIS. Both usually need doing.
What happens if you ignore it
Ignoring a proposed adjustment costs you the adjustment. Ignoring the demand that follows costs considerably more.
An unpaid demand attracts interest under the equivalent of section 220(2) of the 1961 Act, and the refund of any later year can be set off against it. The department will also apply recovery measures — attachment of bank accounts is not theoretical for MSME clients with a visible current account. Processing demands do not by themselves lead to penalty proceedings, because no assessment has been made; but an unresolved mismatch is exactly the kind of item that gets a year selected for scrutiny under section 270(8), and a scrutiny that confirms under-reported income brings penalty under section 439 of the 2025 Act at 50 per cent of the tax on under-reported income, or 200 per cent where the department alleges misreporting.
Rectification, revised return or updated return
These three instruments are not interchangeable and choosing wrongly wastes months.
| Instrument | Use it when | Time limit |
|---|---|---|
| Rectification — section 287 (old 154) | The intimation contains a mistake apparent from the record: TDS credit correctly in 26AS but not allowed, a challan not picked up, an arithmetical error at CPC's end | Four years from the end of the financial year in which the order was passed |
| Revised return — section 263(5) (old 139(5)) | You made the mistake: income omitted, wrong schedule, wrong regime, deduction claimed without eligibility | Twelve months from the end of the tax year, or completion of assessment, whichever is earlier — 31 March 2027 for tax year 2025-26. A fee under section 428(b) applies if you revise after nine months |
| Belated return — section 263(4) (old 139(4)) | You never filed at all | Nine months from the end of the tax year — 31 December 2026 for tax year 2025-26 |
| Updated return — section 263(6) (old 139(8A)) | The revision window has closed and you need to declare additional income | 48 months from the end of the financial year succeeding the tax year, with additional tax of 25%, 50%, 60% or 70% depending on when you file |
The commonest error is filing a rectification for something that is not a mistake apparent from the record. If you forgot to report ₹4,20,000 of consultancy receipts, that is not rectifiable — it needs a revised or updated return. Rectification is for the department's arithmetic, not yours.
On the portal, rectification is raised at Services > Rectification > New Request. The request types offered include Reprocess the Return, Tax Credit Mismatch Correction, Additional Information for 234C Interest, Status Correction, Exemption Section Correction and Return Data Correction (Online / Offline). For a TDS credit that is sitting correctly in Form 26AS but was not allowed, "Tax Credit Mismatch Correction" or a plain reprocessing request usually clears it without any argument.
Interest and fee exposure
| Charge | Old section | New section | Rate |
|---|---|---|---|
| Late filing of return | 234A | 423 | 1% per month or part month on unpaid tax, from the due date to the date of filing |
| Shortfall in advance tax | 234B | 424 | 1% per month where advance tax paid is below 90% of assessed tax |
| Deferment of advance tax instalments | 234C | 425 | 1% per month on each shortfall against the 15%, 45%, 75% and 100% milestones |
| Fee for late return | 234F | 428 | ₹5,000; reduced to ₹1,000 where total income does not exceed ₹5,00,000 |
Interest is not a penalty and is not negotiable. It runs on the tax, not on the income, so a ₹2,00,000 disallowance at a 30 per cent rate costs about ₹600 a month in interest while you argue.
Practical mistakes we see
Salaried clients who changed jobs mid-year file from the second employer's Form 16 alone, claim the basic exemption twice and receive a demand of ₹40,000 to ₹90,000. Business clients pay self-assessment tax on 30 July and file on 31 July, but the challan is tagged to the wrong tax year and the intimation shows the full amount as unpaid. Traders report F&O in the speculative schedule, which throws every set-off calculation. Taxpayers hit Agree on the outstanding demand screen to make the notification disappear, then discover they cannot contest it. And many respond to the 30-day communication by email to their accountant rather than on the portal, which the system reads as no response at all.
When to handle it yourself and when to get help
Do it yourself when the intimation shows a refund, or shows a demand you can trace in five minutes to a challan the system missed or a TDS entry sitting in Form 26AS. A rectification request for either takes ten minutes.
Get help when the proposed adjustment concerns a deduction you claimed on advice, when capital gains or business income are involved, when the amount in dispute exceeds roughly ₹50,000, when you have already crossed the 30-day window, or when the mismatch traces back to something you did not disclose. At that point the question is no longer how to reply to the intimation — it is whether you should be filing a revised or updated return before the department reaches the same conclusion on its own.
Common questions
Is an intimation under section 143(1) a notice I have to reply to?
Not if it agrees with your return or grants a refund — it is a computation statement and no action is needed. You must act only if it raises a demand, in which case you have 30 days to pay or to record a disagreement, or if it disallows something you believe is correct. The document you genuinely cannot ignore is the earlier communication proposing an adjustment under section 143(1)(a), now section 270(2), which carries a 30-day deadline.
What is the difference between a 143(1)(a) communication and a 143(1) intimation?
The 143(1)(a) communication proposes an adjustment and asks for your response within 30 days; nothing has been decided. The 143(1) intimation is the completed processing order, issued after that window closes, and it either grants a refund or raises a demand. If you let the 30 days lapse, the proposed adjustment is simply made and appears in the intimation.
How long does the department have to process my return?
Nine months from the end of the financial year in which the return is made, under section 270(4) of the Income-tax Act, 2025 — the same period as the second proviso to section 143(1) of the 1961 Act. For a return for tax year 2025-26 filed in July 2026, that runs to 31 December 2027. If no intimation is issued within that period, the acknowledgement of the return is treated as the intimation.
I got a demand because TDS shown in my Form 16 was not allowed. What do I do?
First check Form 26AS. If the credit is there and CPC simply did not allow it, file a rectification at Services > Rectification > New Request and choose Tax Credit Mismatch Correction or Reprocess the Return — no revised return is needed. If the credit is absent from 26AS, the deductor has not filed or has filed against the wrong PAN, and you must get them to correct their TDS statement before the credit can be released.
Can I file a revised return instead of replying to the proposed adjustment?
You can, and sometimes you should — if the adjustment is correct and you would rather fix several errors at once, a revised return under section 263(5) is cleaner than agreeing line by line. The revised return window now runs to twelve months from the end of the tax year, so 31 March 2027 for tax year 2025-26, with a fee under section 428(b) if you revise after 31 December. But file it promptly, because once processing is completed the revised return has to be processed afresh and any demand already raised continues to attract interest meanwhile.
Does a 143(1) intimation mean my return has been accepted and the year is closed?
No. Processing under section 270(1) is automated and looks only at internal consistency and the department's own data. The year can still be selected for scrutiny by a notice under section 270(8), the old section 143(2), which may be served up to three months from the end of the financial year in which the return was furnished. A clean intimation is reassuring but it is not a clearance.
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More in this series
- Form GST ASMT-10 scrutiny notice and how to reply in ASMT-11
- Form GST DRC-01A pre-notice intimation and how to reply in Part B
- Form GST DRC-01 show cause notice under section 73 and section 74
- Form GST REG-31 intimation and how to stop suspension of your GSTIN
- Defective return notice under section 139(9): why you got it and how to fix it