Filed your tax returns on time, paid your dues and wrote off this headache from your to-do list for the year? Well, for many, that is only a temporary reprieve. The real relief comes only when the tax department agrees with your tax calculations.
Intimation u/s 143(1)
Check your inbox! This is the season when the department sends out ‘intimations’ through email to assessees regarding the returns filed a few months ago. Called “Intimation under Section 143(1) of the Income Tax Act”, this mail signifies that the department has processed your return.
Take time off to download the attachment to the mail and open it using your PAN (in lower case) and date of birth as password. You will see a statement juxtaposing the income details, the deductions and tax calculations as done by you according to your return, and as worked out by the department. A 143(1) notice will say if any tax or interest is payable or refundable as per the department’s calculations.
In case of a refund, it would most probably be credited to your bank account in sometime if it is more than ₹100. If you sense a delay, details regarding status of your refund can be obtained from https://tin.tin.nsdl.com/oltas/refundstatuslogin.html. You can also call the State Bank of India call centre number 18004259760 to know the status of your refund.
But, what if there is a nasty surprise in the form of more demand for taxes?
When numbers don’t add up
One of the most common reasons for the difference between your calculations and the tax department’s, is the discrepancy in the segment called ‘Pre-paid taxes’.
For instance, while you could have claimed a certain amount as tax deducted at source (TDS) after doing the math, the department could have recognised a lower amount, leading to the demand. Differences come up because, while you claim TDS based on your Form 16 and Form 16A, Form 26AS (your statement of tax credit, accessible through your net banking account or your e-filing account) picks up the TDS details based on what is uploaded by the deductor.
So, if the deductor fails to file the TDS return on time, makes mistakes while filing, omits your details by oversight or gets your PAN wrong in his TDS return, the numbers may not match.
Mistakes can also arise when you are paying advance tax or self-assessment tax — you may, for instance, put in the wrong PAN or tax amount in the challan, if you are making the payment manually. Banks may also sometimes incorrectly furnish details of this tax you deposited, to the department.
Finally, if the department finds that you have missed out on any income or claimed more deductions than allowable, it may point these out in this intimation.
Making the corrections
You can get the help of your auditor or your e-return filing intermediary to take the necessary action if you find that the department is demanding more taxes. Most e-filing websites provide year-round advisory services for a fee.
Also, use their help to write to the department explaining the reason for the mismatch in response to the intimation received.
Typically, if clerical errors were made when you paid the advance tax/self assessment tax, you need to correct the challan at the bank where you made the payment. If the error cropped up when making an entry in the return, you might then have to file a rectification request for your return. If the issue is related to a fault on the part of the TDS deductor, you can request your employer or the bank/institution which deducted the amount to take corrective action.
Remember that the department treats this intimation under Section 143(1) as a notice of demand and expects you to pay the entire demand within 30 days of receipt of this intimation. A printed challan is also enclosed with the intimation for all cases where the tax payable exceeds ₹100 as per the department’s calculations. So, the sooner you take action on noticing the discrepancy, the better.