Home»Blog»Income Tax»What Is Section 143 Of The Income Tax Act: Detailed Explanation On Sections 143(1),(2),(3) And Deadlines
What Is Section 143 Of The Income Tax Act: Detailed Explanation On Sections 143(1),(2),(3) And Deadlines
17 May 2022
Section 143 of the Income Tax Act is an autogenerated intimation message sent to the taxpayer if there are any errors in tax filing. It is sent via email within one year of the financial year within which tax was filed. There could be various reasons why you may get an intimation message from the tax department.
Read on to know all about Section 143 of the Income Tax Act, its provisions, the process of assessment and the deadline for issuance of the final assessment.
What is Section 143 of the Income Tax Act?
Section 143 of the Income Tax Act automatically generates messages informing the taxpayer of any imminent fines or refunds. Taxpayers are liable to receive such intimation under Section 143 within 1 year of filing their return.
The Finance Act of 2008 simplifies the central processing of tax return filing and has adopted a jurisdiction free procedure. The Central Board of Direct taxes aims to organise a hassle-free method of tax filing and returns.
Any communication made to taxpayers from the Centralised Processing Centre (CPC) is termed as intimation, and it includes errors, inconsistencies and verification, etc.
Provisions of Section 143 of Income Tax
Intimations to taxpayers consider every detail, including their total gross income, deductions under Section 80C, advance tax payments, etc. The CPC presents a two-way intimation procedure: taxpayer’s input in Income returns and as computed by Section 143.
CPC provisions the intimation under section 143 of the Income Tax Act either in writing or electronically (via email). Taxpayers are liable to respond to the intimation within 30 days from the issuance date. However, CPC incorporates the original adjustments in case the taxpayer does not respond.
Section 143(1) – Preliminary Assessment
Section 143 of the Income Tax Act acknowledges taxpayers’ information and generates an automated message. A preliminary assessment tabulates information under two significant headings – income tax information provided by taxpayers and computed by the Centralised Processing Centre.
The assessment takes into consideration several factors prompting the taxpayer to make appropriate adjustments. These include income from all sources, total gross income, deductions under Section 80C/80D and TDS (wherever applicable).
Under Section 143 (1), taxpayers may be liable to pay the difference (if any) or await refunds. Additionally, they should respond to the intimation within 30 days.
a. Scope of Assessment under Section 143(1)
Section 143(1) processes taxpayers’ tax information and provisions returns, subject to certain adjustments. These include-
Returns made under section 139
Arithmetic errors in filing returns
Incorrect claims and disallowance of expenditure and losses claimed
Intimation of income appearing in Form 26AS or form 16
b. Process of Assessment under Section 143(1)
Section 143(1) of the Income Tax act makes way for corrections of errors and incorrect claims computed on the basis of adjusted income. CPC intimates the amount payable or refundable to the taxpayer and also if there are disputes regarding income or loss declaration. The section also acknowledges income returns even when no adjustments are required.
c. Duration and Deadline for Section 143(1)
Income tax assessments take into consideration taxpayers’ income-related data within 9 months from the end of the financial year in which the return was filed.
A notice under section 143(2) aims to find discrepancies in income tax returns. Discrepancies include under-reporting income or over-reporting losses. This section makes sure that there are no unpaid taxes.
Taxpayers receive intimations under section 143(2) via email or are sent directly to their address. Additionally, taxpayers should produce all documents that support their claim for deductions and allowances.
a. Scope of assessment under section 143(2)
The IT department issues notice under section 143(2) only after the taxpayer has already submitted his/her tax file. Section 143 of Income Tax prompts the taxpayer to file returns beforehand.
Additionally, the notice requires proof of all income sources, and the assessing officer makes a detailed enquiry for the same. Notices issued under section 143(2) require individuals to respond immediately, failing which he/she is liable to pay a fine of Rs. 10,000 under section 272A.
b. Process of Assessment under Section 143(2)
Assessments made under section 143(2) include-
Limited Scrutiny: A Computer-Assisted Scrutiny Selection (CASS) procedure involves cases with inaccurate return information or disparity. Inspection is limited to particular areas of return mentioned in the notice, viz., foreign tax credit claims and property sales.
Complete Scrutiny: Based on cases flagged by CASS, the section carries out thorough scrutiny of the filed returns and documents supporting them. However, verification is strictly limited to the particular assessment year.
Manual Scrutiny: Criteria for manual scrutiny are subject to conditions set by the Central Board of Direct Taxes.
Section 143(3) – Scrutiny Assessment
Section 143 (3) of the income tax act scrutinises the income tax return details. The primary objective is to confirm the correctness and accuracy of tax return filing. In addition, it checks all the claims and deductions filed by taxpayers and validates the authenticity of all information provided.
a. Scope of assessment under Section 143(3)
This section aims to confirm the information stated by the taxpayer. It checks whether they have understated their income or missed the excess loss. The assessing officer scrutinises details and intimates the same to the taxpayer.
b. Process of Assessment under Section 143(3)
After scrutinising preliminary return details under Section 143 (2), the assessing officer sends an appropriate notice. Therefore, taxpayers are required to produce all necessary documents and proofs in support of their return claims.
The IT Dept. issues notices under section 143 (2) within six months of income tax return filing. Taxpayers are thereafter required to produce all evidence and documents supporting their cause. The assessing officer then produces a declaration and states the amount payable/refundable.
c. Duration and Deadline for Section 143(3)
Section 143 states that the time limit for issuance of the final assessment is 12 months from the end of the assessment year.
Section 143 of Income Tax ensures vigilance and zero disparity. Taxpayers must respond to the notices issued without fail to avoid fines.
FAQs on Section 143
Q1. How to open intimation under section 143 (1) received on email?
Ans: For privacy, the intimation letter is password protected. Users can put their PAN and DOB and read additional instructions (if any).
Q2. Are intimations under Section 143(1) scrutiny orders?
Ans: Intimations under 143 (1) are not investigative or assessment orders. Instead, it is simply an auto-generated message to inform taxpayers of the legitimacy of their tax file returns.
Q3. How can taxpayers handle additional tax amounts under Section 143 (1) of Income Tax?
Ans: The Centralised Processing Centre issues such notices if taxpayers have not declared their ‘Other income’ while filing returns. Also, they may get such notices if deductions are not properly claimed. Therefore, taxpayers need to declare other incomes and present proof of deductions and additional information.
Q4. How much time does the IT Dept. need to reply to the scrutiny assessment (via CASS)?
Ans: Notices under 143 (2) provide 6 months from the end of the financial year of filing tax returns.
Q5. What minimum tax liability prompts the IT Dept. to send notice u/s 143 of Income Tax?
Ans: There is no minimum amount for which the IT Dept. sends notice to taxpayers. It can even be a few hundred rupees.
Before you go…
Looking for instant 🚀 personal loans 24*7 anywhere, anytime? Get personal loans up to ₹20 lakh starting at 9.9% p.a. Install the Navi app now!!
Or, maybe you’re looking to buy that house you’ve been eyeing 🏠 and you need a loan of up to ₹5 crore. Install the Navi app now and get instant in-principle approval right away! Interest rates starting at 8.39% p.a.
How about an affordable health insurance policy👨⚕️ starting at a monthly premium of just ₹235? Install the Navi app now and get your policy in under 2 minutes.
Instead, want to put your savings into action and kick-start your investment journey 💸 But don’t have time to do research. Invest now with Navi Nifty 50 Index Fund, sit back, and earn from the top 50 companies.
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
Cristiano Ronaldo 7 ‘Dark’ Jokes, Football’s Bad Boy
100K+ Laid Off! 7 Ways to Be Financially Prepared for Layoffs
Looking Through SKY: Suryakumar Yadav’s Success Secrets🤫
10 Best Party Places in Bangalore: Rooftop, Brewery, Poolside
10 Best Christmas Gift Ideas Even Santa Wouldn’t Ignore
7 Tax Planning Tips You Cannot Ignore!
Save More! Check Out 10 Best Fuel Credit Cards in India
Inside Allu Arjun’s 100 Cr ‘Rectangle’ House
How to Earn Money on YouTube – Check 7 Sure Shot Ways!
7 Successful Women Entrepreneurs in India Who are Millionaires
We are a diverse group of writers, editors and Subject Matter Experts striving to bring the most accurate, authentic and trustworthy finance and finance-related information to our readers. Our mission is to simplify jargon and industry lingo. We believe sharing knowledge through relatable content is a powerful medium to empower, guide and shape the mindset of a billion people of this country.
What is Profit After Tax and How is it Calculated? Why is it Important for Companies?
An essential step for all organisations is to ensure that they continuously monitor the amounts of ...Read More »
What is Accounting Equation – Meaning, Formula and Calculation with Example
Regardless of the size of the company, financial statements are created using a basic accounting eq...Read More »
Cost Inflation Index: What is CII and How is it Calculated?
The price of commodities rises over time, reducing the purchasing power of money, which is the numb...Read More »
What is White-Collar Crime and What is the Penalty?
White shirts, black coats and well-ironed ties are typical stereotypes representing the rich and el...Read More »
Form 12B – Its Significance in Income Tax and How to fill it
When you join a new company in the middle of a financial year, you must complete several formalitie...Read More »
What is Cash Memo, Its Benefits and How to Create It?
All transactions in accounting must have accurate documentation as proof of financial trail. Docume...Read More »
What is Condonation of Delay in Law? What are its General Principles?
As per the Indian law, there is a certain time frame to submit all forms and applications to the Re...Read More »
Foreign Exchange Management Act (FEMA): Its Regulations and Penalties
Import and export are essential components of the aggregate trade that occurs in India. Import-expo...Read More »
What is Withholding Tax? What are its Rates? How is it Different from TDS?
The Central government of India levies income tax, a type of direct tax, on the income of individua...Read More »
Section 115BAA: Provisions for New Tax Rate for Domestic Companies
The Government of India brought in multiple amendments to the Income Tax Act of 1961 through the Ta...Read More »
TDS on Salary – Calculation, Rules and How Reduce Deduction?
If you check your salary slip, you will find a segment that mentions TDS deduction. TDS on salary v...Read More »
Gross Salary: Meaning, Components and Calculation with Examples
Gross income denotes the total earnings without any deductions or tax adjustments. For salaried ind...Read More »
Diwali 2022: Diwali Holidays – The Festival of Lights
The ‘Festival of Lights’ is one of the biggest and most anticipated festivals in India. This is...Read More »
Best Index Funds – Top 20 Index Funds in India
Index funds replicate the performance of a stock market index, such as the Sensex or Nifty 50 to ge...Read More »