Income Tax Notice Under Section 143(1) Mismatch: Fix It

What is an intimation under section 143(1)?

After you file and verify your return, the department's system processes it. Section 143(1) of the Income-tax Act, 1961 allows this automatic check. The system looks for arithmetical errors, claims that are clearly incorrect on the face of the return, and income shown in departmental data (like Form 26AS, AIS and TDS statements) that you did not include. The result is sent to you as an intimation.

An intimation is not the same as a scrutiny notice under section 143(2). No officer has examined your books at this stage. It simply tells you one of three things: your return is accepted as filed, you have a refund, or there is a difference that creates a demand.

A note on section numbers: the Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026, and the new Act has renumbered the provisions from tax year 2026-27. The section numbers in this article are the familiar 1961 Act numbers, which still govern earlier years and the returns for those years.

How to read the intimation step by step

Do not look only at the demand figure on the first page. Read the whole document, including the computation sheet. The real answer is in the comparison between what you filed and what the system computed.

• Check the assessment year, PAN, and the acknowledgement number of the return being processed.
• Compare 'income as per return' with 'income as per intimation'. Any difference means the system has made an adjustment.
• Look at the tax computation: total tax, rebate, TDS and TCS credit, advance tax and self-assessment tax paid.
• Read the interest lines (such as under sections 234A, 234B, 234C) and any late fee under section 234F. These are calculated by law, so check whether the base amount is right.
• Find the section that says 'refund' or 'demand'. If there is a demand, note whether it is tax, interest or both.
• Read the remarks or 'disclosure of differences' part. It usually tells you which item was adjusted and why.

Common reasons for a mismatch or demand

Most intimations with a demand trace back to a handful of causes. Knowing them helps you find your error, or the department's, quickly.

• AIS or Form 26AS shows income you did not report, such as bank interest, dividend, sale of shares or mutual funds, or rent with TDS.
• TDS credit claimed in your return is more than what appears in Form 26AS, often because the deductor filed the TDS return late, used a wrong PAN or has not filed it at all.
• Salary income in the return differs from the figure in Form 16 or Form 26AS.
• Deductions under Chapter VI-A (for example 80C or 80D) were disallowed because they exceed what the law permits or conditions were not met.
• A deduction that needs a report or certificate was claimed, but the related form was not filed.
• Brought-forward loss or other claims were disallowed because the return was filed after the due date.
• Advance tax or self-assessment tax challan details were entered wrongly, so the payment was not matched.
• Foreign tax credit was claimed without the required form being filed.
• Simple arithmetical errors, or an amount reported under the wrong schedule or head of income.

Income tax notice under section 143(1) mismatch: what to do first

Start by downloading the intimation from the income tax e-filing portal or from your email. Then keep your filed return, Form 16, Form 26AS, AIS and the Taxpayer Information Summary (TIS) in front of you. Compare each line.

If the department is right, the cleanest path is to agree and pay the demand. If a mistake was yours, it may also be worth considering whether a revised return is still possible, since the law allows that only within a limited window.

If the department is wrong, you must respond online. Log in to the portal and open the pending actions or e-proceedings section. Against the outstanding demand, you can choose to agree, or disagree fully or partly, and give reasons with supporting documents.

Sometimes you receive a notice of proposed adjustment before the final intimation. It gives you a limited, law-set window to respond. Do not ignore it, because if you stay silent the adjustment is usually made as proposed.

• Agree with the demand: pay it online and keep the challan.
• Disagree: select the reason, such as 'demand already paid', 'demand incorrect' or 'return already rectified', and upload proof.
• Part agree: pay the portion you accept and dispute the rest.

Rectification, revised return or appeal: which one?

These three remedies are often confused. Choosing the wrong one can waste time, and each has its own time-bound window set by law, so act as soon as you spot the issue.

Rectification under section 154 is for a mistake apparent from the record. For example, the system did not give credit for TDS that clearly shows in Form 26AS, or a deduction you reported in the return was left out of the computation. You file the request online on the portal, and the department passes a fresh order.

A revised return under section 139(5) is for a mistake in the return you filed, such as an income item or deduction you forgot to report. It replaces the original return. It is available only within the time the law allows.

An appeal to the Commissioner (Appeals) under section 246A is for cases where you disagree on merits and rectification is not enough. It is filed in Form 35 and also has a limited filing window.

If your return was processed on wrong data that has since been corrected, such as the deductor updating the TDS return, rectification is usually the faster route. The right choice depends on the facts of your case.

Mistakes to avoid and how CGA can help

The biggest mistake is ignoring the intimation because it looks like a routine email. Unpaid demands can lead to interest, adjustment against future refunds and further action. Another mistake is paying a demand blindly without checking, when the error may have been the system's or a deductor's.

Also avoid responding with vague reasons and no documents. A short, clear reply with matching proof, such as Form 26AS pages, bank statements, challans and deduction certificates, works far better.

At CGA - Canjain Global Advisors, our team of Chartered Accountants and Advocates reviews your intimation against AIS, Form 26AS and your return. We tell you whether to pay, rectify, revise or appeal, and we file the response on your behalf. We work PAN India from our offices in Delhi NCR and Haryana. Share your intimation with us and we will explain your next step. Outcomes always depend on the facts and records in your case.

Frequently asked questions