Section 143(1) Intimation: How to Read and Respond

Short answer: An intimation under Section 143(1) of the Income-tax Act, 1961 is a preliminary, computer-generated summary sent by the Centralised Processing Centre (CPC). It compares the income and tax details you filed in your return with the department's calculations. It results in either a tax demand, a refund, or a 'no demand, no refund' notice. It is not a scrutiny notice but requires your careful attention.

As of September 2026, all tax filings for the Assessment Year 2026-27 (Financial Year 2025-26) are governed by the Income-tax Act, 1961, as amended by the Finance Act, 2025. Note that the new Income-tax Act, 2025, is scheduled to replace the 1961 Act from 1 April 2026, which will apply to income earned from that date onwards (i.e., from AY 2027-28).

What is an intimation under Section 143(1)?

This is a notice informing you that your income tax return has been processed by the department's automated system. It is a comparison of what you declared (income, deductions, TDS) against the data available with the Income Tax Department (from your Form 26AS, AIS, and TIS). The system performs an initial check for arithmetic errors, incorrect claims, or inconsistencies. It is the first formal communication from the department after you e-file your ITR online.

What are the three possible outcomes of a 143(1) intimation?

An intimation under Section 143(1) will result in one of three clear outcomes for the taxpayer.

1. No Demand, No Refund: This means the department's computation matches the details you provided in your tax return perfectly. No further action is required from your side, but you should save a copy of this intimation for your records.
2. Refund Due: This is good news. The department's computation shows that you have paid more tax than your actual liability. The intimation will specify the refund amount, which will be credited to your pre-validated bank account.
3. Demand Payable: This means the department's computation indicates you have paid less tax than your actual liability. The intimation will show the outstanding tax amount, along with interest under sections 234A, 234B, or 234C, if applicable. You must pay this demand or dispute it.

How do I read and understand a 143(1) intimation?

You must carefully compare the two main columns in the intimation PDF document. The first column, "As provided by taxpayer in Return of Income," shows the figures you entered. The second column, "As computed under section 143(1)," shows the figures calculated by the CPC. Any difference between these two columns is the reason for a demand or a change in your refund amount.

Particulars	As provided by taxpayer in Return of Income (₹)	As computed under section 143(1) (₹)	Potential Reason for Difference
Gross Total Income	15,00,000	15,50,000	Unreported income like savings interest or capital gains found in AIS.
Deductions u/Ch VI-A	1,50,000	1,25,000	Claimed deduction exceeds statutory limit or is not permissible under the chosen regime.
Taxable Income	13,50,000	14,25,000	Consequential effect of changes in income or deductions.
Tax Payable on Total Income	1,35,000	1,52,500	Tax calculated on the revised taxable income as per applicable slabs.
TDS/TCS/Advance Tax Claimed	1,40,000	1,38,000	TDS claimed in ITR does not match with Form 26AS or AIS.
Net Tax Payable / (Refundable)	(5,000)	14,500	The final outcome after all adjustments. In this case, a refund claim turns into a demand.

What are common reasons for a demand in a 143(1) notice?

A tax demand typically arises from simple mismatches that the CPC's automated system flags.

• TDS Mismatch: The TDS you claimed in your return is more than the TDS appearing in your Form 26AS.
• Unreported Income: You forgot to declare income sources like interest from savings accounts, fixed deposits, or minor capital gains which are visible in your Annual Information Statement (AIS).
• Incorrect Deduction Claims: You claimed a deduction that is not allowed under your chosen tax regime (e.g., claiming 80C under the new regime) or exceeded the permissible limit.
• Calculation Errors: Simple arithmetic mistakes in calculating tax liability or interest.
• Incorrect Personal Information: Mismatches in PAN or bank account details can delay refunds.

What should I do if I receive a demand notice under Section 143(1)?

If the intimation shows a tax demand, you have two primary options.

1. Agree and Pay: If you review the notice and agree with the department's calculation, you should pay the demand within 30 days of receiving the intimation. You can pay this online through the e-filing portal using Challan 280. Delay in payment will attract interest under Section 220(2).
2. Disagree and File Rectification: If you believe the demand is incorrect due to a factual error or an omission in your original filing, you can file a rectification request under Section 154. This is done online via the income tax portal. You must clearly state the reason for your disagreement and provide supporting data.

Worked example

Let's take the case of Anjali, a software engineer in Bengaluru, for FY 2025-26 (AY 2026-27). She files her return under the default new tax regime.

• Income Declared by Anjali:

  • Salary Income: ₹16,00,000
  • Standard Deduction: ₹75,000
  • Taxable Income: ₹15,25,000
  • She forgets to include ₹40,000 of interest income from a Fixed Deposit.

• Tax Calculation by Anjali (on ₹15,25,000):

  • Tax as per new regime slabs: ₹1,62,500
  • Health & Education Cess (4%): ₹6,500
  • Total Tax Liability: ₹1,69,000
  • TDS Deducted by Employer: ₹1,75,000
  • Refund Claimed by Anjali: ₹1,75,000 - ₹1,69,000 = ₹6,000

• Processing u/s 143(1) by CPC:

  • The system detects the undeclared FD interest of ₹40,000 from her AIS.
  • Salary Income: ₹16,00,000
  • Interest Income: ₹40,000
  • Gross Total Income: ₹16,40,000
  • Standard Deduction: ₹75,000
  • Revised Taxable Income: ₹15,65,000

• Tax Calculation by CPC (on ₹15,65,000):

  • Tax as per new regime slabs: ₹1,71,000 (Tax on ₹15,00,000 is ₹1,50,000 + 30% on remaining ₹65,000 is ₹19,500. Total is ₹1,69,500. Let's re-calculate slabs: 0-3L:0, 3-6L:15k, 6-9L:30k, 9-12L:45k, 12-15L:60k, >15L:30%. Tax on 15L is 1.5L. On remaining 65k, 30% is 19.5k. Total 1,69,500. Okay let's adjust for the 20% slab. Slabs: 0-3, 3-6(5%), 6-9(10%), 9-12(15%), 12-15(20%). So tax on 15L is 1.5L. On remaining 25k, tax is at 30%? No, the slabs were changed. FY 25-26 slabs (AY 26-27) are: 0-3L Nil, 3-6L 5%, 6-9L 10%, 9-12L 15%, 12-15L 20%, Above 15L 30%. Tax on 15.25L -> Tax on 15L is 1.5L, Tax on 0.25L is 30% of 25k = 7.5k. Total 1,57,500. Ah, my previous example calc was wrong. Let's fix. Tax on 15L is (3L5%+3L10%+3L15%+3L20%) = 15k+30k+45k+60k = 1.5L. Correct. My tax on 14.5L calc was also wrong. It's not 20% on the whole chunk. It is slab based. Okay, let's re-do the example with correct slab calculations.

• Tax Calculation by Anjali (on ₹15,25,000):

  • Tax on first ₹15,00,000: ₹1,50,000
  • Tax on next ₹25,000 @ 30%: ₹7,500
  • Total Tax: ₹1,57,500
  • Health & Education Cess (4%): ₹6,300
  • Total Tax Liability: ₹1,63,800
  • TDS Deducted by Employer: ₹1,75,000. TDS on Interest @ 10%: ₹4,000. Total TDS: ₹1,79,000
  • Refund Claimed by Anjali: ₹1,79,000 - ₹1,63,800 = ₹15,200

• Processing u/s 143(1) by CPC (with the undeclared income):

  • Revised Taxable Income: ₹15,65,000 (16L salary + 40k interest - 75k SD)

• Tax Calculation by CPC (on ₹15,65,000):

  • Tax on first ₹15,00,000: ₹1,50,000
  • Tax on next ₹65,000 @ 30%: ₹19,500
  • Total Tax: ₹1,69,500
  • Health & Education Cess (4%): ₹6,780
  • Revised Total Tax Liability: ₹1,76,280
  • Total TDS Credit available (as per AIS): ₹1,79,000
  • Final Refund as per 143(1): ₹1,79,000 - ₹1,76,280 = ₹2,720

Anjali receives an intimation showing a reduced refund of ₹2,720 instead of the ₹15,200 she claimed, because the system automatically added her undeclared interest income.

Common mistakes

1. Ignoring the Intimation: Never ignore a 143(1) intimation, even if it says 'No Demand, No Refund'. Always review it to ensure the department's calculations are correct and match your records.
2. Not Reconciling with AIS/26AS: Filing your return without cross-checking all income and TDS entries with your AIS and Form 26AS is the most common source of error.
3. Delaying a Response: Failing to pay a valid demand within 30 days leads to penal interest. If you disagree, failing to file for rectification promptly means the demand becomes final.
4. Forgetting All Income Sources: Many taxpayers forget to include interest from savings bank accounts (taxable above ₹10,000), fixed deposits, or small dividend incomes.
5. Filing Rectification for the Wrong Reason: A rectification request can only correct mistakes apparent from the record. It cannot be used to declare new income or claim a deduction you forgot to claim initially. For that, you must file a revised or updated return.

How SP & SC helps

Receiving a notice from the Income Tax Department can be stressful. At SP & SC, we simplify the process for you. Our team of Chartered Accountants will thoroughly review your Section 143(1) intimation, compare it with your ITR and financial data, and explain the exact cause of any discrepancy. We handle the entire response process, whether it involves paying the demand correctly or filing a meticulous rectification request under Section 154 on your behalf. We ensure your case is presented accurately to the tax authorities, saving you time and preventing future complications. For comprehensive tax compliance and notice response, explore our Income Tax Filing services.

Frequently asked questions

H3: What is the difference between an intimation u/s 143(1) and a scrutiny notice u/s 143(2)?

A 143(1) intimation is an automated, preliminary processing of your return. A scrutiny notice under Section 143(2) is a precursor to a detailed examination of your return by an Assessing Officer, where you will be required to submit documents and explanations to justify the items in your ITR.

H3: Can I ignore a demand of a small amount?

No. Even a small demand amount will accrue interest if left unpaid. It can also be adjusted against any future refunds you may be due, and may lead to complications in future tax assessments.

H3: How long does it take to receive a 143(1) intimation?

The law permits the Income Tax Department to send an intimation under Section 143(1) up to nine months from the end of the financial year in which the return was filed. For a return filed in July 2026 (for FY 2025-26), the intimation can be sent anytime up to 31st December 2027.

H3: My refund in the intimation is different from what I claimed. Why?

This is usually because the CPC has made adjustments. Common reasons include disallowing a deduction you were not eligible for, adding income that you missed declaring but was present in your AIS, or a mismatch in the TDS amount you claimed versus what is in the department's records.

H3: How do I pay a tax demand raised in a 143(1) intimation?

You can pay the demand online via the Income Tax e-filing portal. Log in, go to the 'e-Pay Tax' section, and generate a challan (Form 280). You can pay using net banking, debit card, or other available online payment modes.

Get a fixed-fee quote

If you have received an intimation under Section 143(1) and are unsure how to proceed, don't worry. Share the notice and your filed return with us. Our team will analyze the documents and provide a clear explanation with a written fixed-fee quote for handling the response from start to finish. Contact SP & SC or WhatsApp us at +91 90356 74566. We are here to resolve your tax compliance matters efficiently.