Income tax intimation under section 143(1): how to read it and respond

A few weeks or months after you file your income tax return, an email arrives from the Centralised Processing Centre (CPC) with a password-protected PDF titled "Intimation under section 143(1)". For many people it simply confirms the return. For others it shows a refund, or a demand they were not expecting. This guide explains how to read the intimation, what to do when the department proposes an adjustment, and what changes with India's new income tax law.

Two different communications

People often treat these as the same thing. They are not.

Proposed adjustment under section 143(1)(a). Before processing is complete, the CPC may notice something it thinks is wrong in your return and propose an adjustment. It asks you to respond, usually within 30 days, before it makes the change. This is the stage where you can still explain.

Intimation under section 143(1). This is the result of processing. It compares the figures in your return with the department's computation and shows whether the result is a match, a refund, or a demand.

If you receive a proposed adjustment, act on it. If you only receive the intimation, read it carefully to check whether anything has changed.

Reading the intimation

The intimation has two columns: as provided by the taxpayer and as computed under section 143(1). Go through them line by line. The parts that matter most are:

• Gross total income and total income, to see whether any income has been added;
• deductions, to see whether any have been reduced or disallowed;
• taxes paid, including TDS, TCS, advance tax and self-assessment tax, to see whether all your payments have been counted; and
• the final line, which shows net payable (demand), refund, or nil.

If both columns match and the result is nil or the refund you expected, there is nothing to do. Keep the document with your records.

Why the figures may differ

The most common reasons for a proposed adjustment or a difference in the intimation are:

• Income in your return does not match Form 26AS, the AIS, or Form 16/16A. For example, interest income reported by your bank is missing from the return, or salary differs from your employer's Form 16.
• TDS credit claimed is more than what appears in Form 26AS, often because a deductor filed their TDS return late or with the wrong PAN.
• A deduction exceeds the legal limit, or was claimed in a return filed after the due date when that deduction is only allowed on a timely return.
• Losses carried forward from a late return, which are generally not allowed.
• Simple arithmetical errors.

How to respond to a proposed adjustment

1. Log in to the e-filing portal and go to Pending Actions and then e-Proceedings. The proposed adjustment will be listed there.
2. Download the notice and read each variance. The notice will show what you reported, what the department sees, and the difference.
3. Check your records. Compare against Form 26AS, the AIS, Form 16/16A, bank statements and investment proofs.
4. Respond to each item. For each variance, choose whether you agree, disagree or partly agree. If you disagree, explain why, briefly and specifically. For example: "Interest of ₹12,400 is already included under Income from other sources."
5. Submit and e-verify the response, then save the acknowledgement.

If the mistake is yours and the return needs changing, you can also file a revised return under section 139(5) if you are within the time allowed.

If you do not respond in time, the CPC will usually proceed with the adjustment, which often results in a demand.

If the intimation shows a demand

1. Check whether the demand is correct. Most wrong demands come from TDS mismatches or from income that is already in the return under a different head.
2. If it is correct, pay it through e-Pay Tax on the portal, normally within 30 days. Interest accrues on unpaid demands.
3. If it is wrong, file a response to the outstanding demand on the portal: disagree with the demand and give the reason. Where the cause is a TDS mismatch, ask the deductor to correct their TDS return, which updates Form 26AS.
4. If a refund has been adjusted against an old demand, check that the old demand is genuine before accepting the adjustment.

What changes under the Income-tax Act, 2025

The Income-tax Act, 2025 replaced the Income-tax Act, 1961 with effect from 1 April 2026. It uses a single "tax year" instead of "previous year" and "assessment year", and renumbers most sections. The processing of returns that section 143(1) covered falls under section 270(1) of the new Act.

The practical effect is about timing:

• Returns for assessment year 2026-27 and earlier (income earned up to 31 March 2026) are processed under the old Act, so you will still see 143(1) intimations for them.
• Returns for tax year 2026-27 onwards, filed from 2027, will be processed under the new Act, and the intimation will refer to the new section.

The process of comparing your return with the department's data, proposing adjustments and issuing an intimation remains broadly the same. Check the notice for the section it is issued under, and follow the instructions it gives.

How to avoid surprises next year

• Check the AIS and Form 26AS before filing, not after. Most adjustments come from income or TDS that appears there but not in the return.
• Keep investment and deduction proofs together for the whole year.
• File on time so deductions and carried-forward losses are not lost.
• For a business, keep the books reconciled with GST returns, because turnover in your income tax return is increasingly compared with GST data.

Key takeaways

• A 143(1)(a) proposed adjustment is a chance to explain; respond within 30 days.
• A 143(1) intimation shows the result of processing; compare both columns line by line.
• Most differences come from mismatches with Form 26AS, the AIS or Form 16/16A.
• Respond through e-Proceedings or the outstanding demand section on the e-filing portal.
• From tax year 2026-27, processing moves to section 270(1) of the Income-tax Act, 2025.

This guide is general information, not tax advice. Your situation may differ. Consult a chartered accountant before responding to a notice or a demand.