Income Tax Return Processing

Income Tax Return filing and ITR Verification

Once an individual or entity completes the filing process and verifies it, the Income Tax Department (ITD) begins processing and takes further action depending on various scenarios, like issuing a refund if TDS deducted more than your tax liability, or initiating scrutiny, depending on the circumstances. You can file your ITR with Tax2win here.

The taxpayer should verify their return within 30 days of filing it, and if not verified within specified time period, then ITR is considered invalid. Here are different ways of verifying ITR-

• Sending signed ITR-V physically to the CPC, Bangalore
• Through Aadhaar OTP
• Through EVC generated from a pre-validated bank account
• Through EVC generated from a pre-validated Demat account
• Through EVC through ATM (offline method)
• Through Net Banking
• Through Digital Signature Certificate (DSC)

ITR processing under section 143(1)

Once the ITR has been verified, the department processes the income tax return and sends the intimation under Section 143(1) of the Income Tax Act, 1961. This intimation will be sent to the registered email address and mobile number. A text message is sent to the mobile number which is:

(example) ITR for AY 2023-24 and PAN abcxxxxx1r have been processed at CPC. Intimation u/s 143(1) has been sent to your registered email ID. If not received, check SPAM folder.

CPC processes each e-filed return, and an intimation u/s 143 (1) is generated. The department compares the information submitted in the taxpayer's return to the records held by the CPC and issues an intimation under section 143 (1). The intimation also includes a tax computation, as calculated by both the taxpayers and the income tax department.

Possible Outcomes of Section 143(1) Processing:

• No Assessment: If the AO finds the ITR to be complete, accurate, and consistent, they send the simple intimation without making any changes.
• Assessment with Adjustments: The AO may make adjustments to the income or deductions claimed by the taxpayer, resulting in a higher or lower tax liability.
• Notice Under Section 143(2): In certain cases, the AO may find it necessary to conduct a detailed scrutiny of the taxpayer's affairs. They may issue a notice under Section 143(2) to initiate a more comprehensive assessment process.

How to know the status of ITR processing?

Here are the steps to follow to know the status of ITR processing -

• Log in to the income tax portal using PAN and password to check the status of their ITR processing
  Hover your cursor over the ‘e-file’ tab and click on ‘View filed returns’ under ‘Income Tax Returns’
  
  
• Post that, the following screen will appear where taxpayers can see the status of their ITR processing along with the date of processing.
  
  

What are the possible status post the ITR processing?

There are 3 possible scenarios under ITR processing that the taxpayers should know to decode their intimation under section 143(1).

• No demand, no refund
  In this case, the department accepts the taxpayer's information filed in the ITR, and the ITR processing status changes to "No demand, no refund." It signifies that the assessee does not owe or receive any amount to/from the departments.
• Demand determined
  The department issues a demand intimation if there is a mismatch in the taxes paid or the credit claimed. Under section 143 (1), the demand must be paid within the time period specified in the intimation.
• Refund determined
  The refund is issued to the taxpayers if the return filed by the taxpayer is found to be accurate and includes a refund claim. The credit of refund process typically takes 20-45 days from the date of e-verification of the income tax return. However, if the acknowledgment (ITR V) is physically sent to the CPC, it may take longer.

What is the password for intimation notice U/S 143(1)?

The intimation notice received from the Income Tax Department comes with password protection, and you need to decode the password before opening it. The default password set by the Income Tax Department comprises your PAN and date of birth. If your PAN is CMDPP5555E and your date of birth is March 16, 1994, your Intimation notice password will be cmdpp5555e16031994.

Don’t let the intimation notice under section 143(1) stress you out. Need help in responding to Income Tax Notice, connect with the experts here.