Getting an income tax notice can feel stressful, especially if you’re unsure what went wrong. One such notice is the Intimation under Section 143(1). It may indicate a tax demand or a refund mismatch, and naturally, your initial reaction could be one of confusion or concern. However, you need not worry; many taxpayers face this issue, and it’s often easier to fix than it seems.
These discrepancies typically arise from minor errors, such as a misreported figure or a missing document. The good news? You can resolve most of them online without stepping into any tax office. In this article, we’ll walk you through how to identify the issue, understand your options, and finally rectify the issue, with clarity, speed, and confidence.
Understanding the Discrepancy in An Intimation Order
Before taking any action, it is important to understand why you received the intimation under Section 143(1). The notice usually outlines the differences between your filed return and the tax department’s records.
Arithmetical Errors
The most common issue is simple calculation mistakes in your ITR. These may include incorrect totals of income, deductions, or tax payable. Even a small manual error can cause a mismatch when your return is processed by the automated system at CPC. Always review your return’s figures carefully before submission to avoid such issues.
Mismatches in Reported Data
Discrepancies often arise when the information reported in your ITR differs from what is available with the tax department through Form 26AS, Form 16, or Form 16A. For example, claiming tax credits not reflected in Form 26AS or forgetting to mention a source of income may result in adjustments under Section 143(1). Cross-verifying your data before filing can help prevent these mismatches.
Incorrect Deduction or Exemption Claims
If you have claimed deductions or exemptions that either exceed the permitted limits or are not backed by proper data, they may be rejected. Common examples include inflated claims under Section 80C or unsupported deductions under medical insurance. The system automatically disallows such entries, leading to a tax demand or a reduced refund. Make sure to only claim deductions you are fully eligible for.
Disallowance of Loss Adjustment
If you have tried to set off losses from previous years, those claims might be rejected if the original loss return was filed late. Losses can only be carried forward if the relevant return was filed within the due date. Failing this condition results in automatic disallowance by the CPC.
What to Do If You Agree With the Discrepancy?
If you review the intimation and agree with the adjustments made by the Income Tax Department, the next steps are quite simple. Accepting the changes and taking prompt action ensures that the matter is resolved without further notice or penalty.
Paying the Tax and Interest
When the intimation shows a valid tax demand, you should pay the outstanding amount along with any applicable interest under Section 234A, 234B, or 234C. This payment can be made through the Challan 280 form, available on the Income Tax portal. Once the tax is paid, make sure to save the acknowledgement for your records, as it may be required in case of any future clarification.
Filing a Revised ITR to Correct the Original Filing
Even though the intimation under Section 143(1) is not a final assessment order, you may still choose to file a revised ITR to correct the mistakes in your original return. This is especially useful if the errors relate to income disclosure, deduction claims, or tax computation. Filing a revised return helps maintain clean records and avoid issues during future assessments.
What to Do If You Disagree With the Discrepancy?
Sometimes, the adjustments made by the Centralised Processing Centre (CPC) may not reflect your actual records. If you believe that the intimation contains an obvious error, you have the right to correct it by filing a rectification request through the income tax portal.
Filing a Rectification Request Online
When you disagree with the discrepancy and find a mistake apparent from the record, you should file a rectification under Section 154. Begin by logging into the income tax portal using your PAN credentials. Go to the Services section, select Rectification, and click on New Request. Choose the relevant assessment year and request type, such as Tax Credit Mismatch Correction or Reprocess the Return.
Clearly explain the reason for your request and attach any supporting documents like Form 16, Form 26AS, or investment proofs if required. Submit the form. There is no need to e-verify a rectification request, which makes the process simpler for taxpayers. The department will review your submission and issue an amended intimation if the correction is accepted.
Example for Crypto Investors
If you trade or invest in crypto, even a small reporting error can lead to a mismatch in your tax return. Let’s say:
- You forgot to report a wallet-to-wallet transfer, making your holdings appear inconsistent.
- Your exchange did not provide the correct TDS certificate, causing a mismatch in claimed credits.
These can trigger adjustments under Section 143(1). However, if you have valid proof, filing a rectification request can help you correct the records and prevent any unnecessary tax demands.
Step-by-Step Guide to Filing a Rectification Request
If you spot an apparent error in the Section 143(1) intimation, filing a rectification request is the best way to get it corrected. The process is entirely online and can be completed in a few easy steps through the income tax e-filing portal.
Steps to Submit a Rectification Request
- Log in to The E-Filing Portal:
Use your PAN and password to sign in to the Income Tax Department’s official portal.
- Go to the “Services” Menu and Select “Rectification”:
Once you are on the dashboard, click on the Services tab and choose the Rectification option from the dropdown list.
- Click on “New Request”:
On the Rectification page, initiate a new request by selecting the New Request button.
- Enter The Correct Assessment Year And Request Type:
Choose the assessment year for which you received the intimation. Select a suitable request type, such as Reprocess the Return or Tax Credit Mismatch Correction.
- Specify The Reason And Upload Supporting Documents (If Needed):
Briefly state the reason for the rectification. Upload supporting documents like Form 16, Form 26AS, or proof of deductions if the portal allows or requests them.
- Submit The Request:
Once all details are reviewed, click Submit. There is no requirement to e-verify rectification requests, making the process straightforward and efficient.
Important Points to Remember While Filing a Rectification Request
Before submitting a rectification request, it is essential to understand a few legal and procedural rules that guide how such corrections are handled. These rules help ensure that your request is valid, timely, and supported by appropriate documentation.
Time Limit for Filing a Rectification
A rectification request under Section 154 must be submitted within four years from the end of the financial year in which the intimation was issued. Submitting the request beyond this window makes it legally invalid. Always check the date on your 143(1) intimation and count the four-year period from the end of that financial year, not from the date of the notice.
Scope of Rectification Under Section 154
You can only file a rectification request if there is a mistake apparent from the record. This means the error must be clear, self-evident, and should not require deep interpretation or debate. For example, mismatches in tax credits, basic calculation errors, or wrongly disallowed deductions may qualify, but differences in interpretation will not.
Revised Return vs Rectification Request
If you discover an error in your ITR before the department processes it, then filing a revised return is the right step. However, if you have already received a Section 143(1) intimation and the error is minor and factual, a rectification request is appropriate. A revised return corrects your filing, while rectification corrects the department’s processing of that filing.
Consequences of Not Responding to a Tax Demand
If you ignore the tax demand raised in the 143(1) intimation, the Centralised Processing Centre may finalise the adjustment and consider the amount due. This can lead to interest penalties, recovery actions, and even legal notices. It is always better to respond quickly, either by paying the dues or filing a rectification.
How Can KoinX Help With Crypto Tax Notices in India?
When your income tax return involves crypto activity, even the smallest error can lead to an intimation under Section 143(1). It could be a missing transaction, a wrong TDS entry, or simply an incomplete disclosure of wallet activity. These discrepancies often stem from manual data handling or a lack of clarity around crypto tax rules. That is where KoinX steps in as your compliance ally. KoinX is one of the best crypto tax software in India. It helps you trace these issues, correct them with confidence, and avoid penalties. Here’s how it can help:
Real-Time Tax Calculations
The platform gives you instant tax previews, helping you stay on top of realised gains, losses, and tax liabilities. With everything categorised automatically, you’re less likely to miss reporting a trade or income source.
Error-Detection Tools
KoinX flags potential mismatches or data gaps that could trigger an intimation notice. You’ll be alerted if there’s a TDS discrepancy or if an income entry doesn’t align with your wallet data.
Audit-Ready Tax Reports
With KoinX, you get downloadable, department-approved tax reports that match the Income Tax Return format, including Schedule VDA. This helps you file revised returns or rectification requests with precision and accuracy.
Expert Support for Rectification
If you’ve already received an intimation, KoinX’s support team can help you prepare a legally valid rectification response. You’ll get guidance on what proof to upload and how to navigate the portal quickly.
So why wait? Resolve your crypto tax intimation with ease. Sign up on KoinX today and make sure your next return is 100% accurate.
Conclusion
Dealing with an intimation under Section 143(1) is not always a sign of trouble, but it does demand timely attention and accuracy, especially if crypto transactions are involved. By understanding the notice, identifying the discrepancy, and taking the right corrective steps, you can stay compliant and stress-free.
KoinX helps you prepare clean and accurate crypto tax reports, resolve mismatches, and submit revised filings with ease. Don’t wait for minor errors to turn into major complications. Join KoinX today and take control of your crypto taxes before your next intimation arrives.
Frequently Asked Questions
Can I Rectify A Section 143(1) Intimation Without A Chartered Accountant?
Yes, you can file a rectification request yourself through the e-filing portal. The process is user-friendly and does not require a Chartered Accountant. However, if your case involves complex crypto transactions or multiple income sources, professional help may ensure better accuracy and reduce the chances of future discrepancies.
Can A Rectification Be Filed Multiple Times For The Same Year?
Yes, you can file multiple rectification requests for the same assessment year, provided each is for a different valid issue. However, once a rectification request is processed and resolved, a new one can only be filed if a fresh “mistake apparent from record” is identified in the processed order or intimation.
Is Rectification The Same As Filing A Grievance?
No, a rectification request is a formal correction mechanism under Section 154 for errors in an assessment or intimation. A grievance, on the other hand, is used to raise service-related complaints or portal issues. They are handled by different departments within the Income Tax ecosystem and follow separate procedures.
Will I Receive A Fresh Intimation After Rectification?
Yes, if your rectification request is accepted and processed, the Income Tax Department will issue a fresh intimation reflecting the updated outcome. This could involve a corrected tax demand, refund, or acknowledgment of no further dues. You will receive it on your registered email and can also download it from the portal.
Can Rectification Requests Be Filed For Previous Years?
Yes, you can file a rectification request for any past year, provided it is within four years from the end of the financial year in which the original intimation was issued. If the time limit has passed, your only option may be to file a legal appeal, not a rectification.
