In an earlier Post regarding Communication u/s 143(1)(a) for PAN XXXxxxxxXX for the A.Y. 2017-18 we had asked readers to wait for further clarity from Income tax department as was communicated by them through their helpline number – 18001034455.
But it’s more than 10 days now and there have been NO further clarification coming from department, we thought we should start responding to Proposed adjustment u/s 143(1)(a) of Income Tax Act, 1961 Notice.
Why taxpayers are getting Notice u/s 143(1)(a)?
The Section u/s 143(1)(a) existed earlier too but has not been used extensively by tax department. What has happened this time they are sending out notices even if there is slightest mismatch between Form 16, Form 16A and Form 26AS versus the return filed.
Even for deductions u/s 80TTA which exempts interest income up to Rs 10,000 in savings bank account which mostly do no figure out in Form 16 are receiving notices. The problem is we still do NOT know what proof tax department would require for this exemption.
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All pensioners who do not have to submit their investment declaration u/s 80C too are receiving this notice.
Other than that salaried employees who have not submitted their investment proofs or rent receipts to their employers and claimed such deductions at the time of filing the return are getting these notices.
How to respond to Notice u/s 143(1)(a)?
The notice mentions that you should respond to the same within 30 days of receiving it. We list down steps you should follow to respond to the notice.
Step 1: Login to the efiling portal – incometaxindiaefiling.gov.in
Step 2: Goto e- Proceeding > eAssessment menu
For some tax payers this section may show nothing even if they have received notice. This is because it takes 2 to 3 days for the details to appear.
This is what is visible on clicking the above menu options.
Also Read: How are your Investments Taxed?
Step 3: Click on Prmia Facie Adjustment u/s 143(1)
This will open the next screen
Also Read: Best Tax Saving Investments u/s 80C
Step 4: Choose “Submit” to Direct to the next page
Step 5: Choose to Agree or Disagree
The details show the same details as present in the notice. Now you have to choose from “Response” – Agree or Disagree.
In case you agree which means the tax department was right in its calculation, you should submit the response and file a revised return within 15 days after paying additional taxes.
Also Read: How to file Revised Income Tax return?
Another thing to notice is if you agree it sums up the Variance – which is a bug in the system. Both the rows question the same exemption and hence it should have shown addition of Rs 1,59,000 only (as in the above example).
Also Read: How to pay additional Self-Assessment Tax Online?
However in most cases Taxpayer would disagree to the addition. So if you respond by choosing Disagree, an additional response table opens up at the bottom asking for more details.
The Form for reply is shown below:
The form has the following fields. Read carefully on what needs to be filled:
TAN
- Enter the TAN of the employer (available in the Form 16 or Form 26AS) for salary income
- If you have income from interest etc, put TAN of bank/company (available in Form 16A or Form 26AS)
Deduction made under section
- Mention 80C (for investment in PPF, Tax Saving Fixed Deposit, etc),
- 80CCD(1), 80CCD(2) or 80CCD(1B) for NPS as the case may be,
- 80TTA for taking deduction of Rs 10,000 on interest from savings account
- 10(13A) for HRA
- 80D for medical insurance
- 80E for education loan
- 80G for donation made to charity/NGOs, etc
You’ll get the complete list from the ITR form you filled
Also Read: 21 changes in Income Tax laws in FY 2017-18
Amount paid/credited by deductor
Put the amount paid – you’ll get this from Form 16 or 26AS (shown below) for salaried and Form 16A or 26AS for interest income, etc.
Nature of receipt as per the deductor
This would be any of five types of income defined by income Tax – salary (Pension is salary income), Business, Capital Gains, income from house and other income (includes interest income)
Income/Gross Receipts as per the return
Enter the amount after taking on account the above deduction.
So for the case above I would put Rs 4,36,160 (5,95,156 – 1,59,000) which was the income filed in actual tax return
Head of Income/Schedule under which reported in the return
This should be same as “Nature of receipt as per the deductor” until you have put it differently in income tax return. For e.g. Pension income should be treated as salary income but someone unknowingly has put in other income. So in this case he has to fill “Other Income”
Head of Income/Schedule under which reported in the return IS ACCEPTING ONLY NUMERIC VALUE BUT YOU SAID IT IS SAME AS NATURE OF RECEIPT. So you’ll have to put following numbers (Sections) as the case may be:
- Salary/Pension – 17
- Capital Gains – 54
- House Property – 24
- Business/Profession – 28
- Other Income (includes interest) – 56
This idea came from comment from Sagar (Thanks Sagar)!
Also I am surprised how tax department thinks all taxpayers would know these sections. If it was just 5 they should have given a drop down rather than fill numbers only!
Also Read: When and How can Tax Benefits Claimed Earlier be Reversed?
Reason
There are 10 reasons to choose from as shown below:
In case you claimed HRA which was not present in Form 16 then select reason as “Allowance exempt claimed in return but not in Form 16”
Also Read: How to claim Tax Benefit on both HRA & Home Loan?
For all deductions under chapter VIA (includes 80C, 80D, 80E, NPS related etc) which you claimed but were not part of Form 16 select “Deductions claimed in the return but not in Form 16”
In case everything was present in your Form 16 but still you got notice select “Others” and mention in Justification that the deduction already present in Form 16. Also attach the Form 16.
Justification/Remarks
Briefly state why your Allowance or deduction was not in Form 16. It could be “employer did not consider this deduction” or “investment was made after proof submission to employer” etc.
And most important DO NOT forget to attach relevant documents.
- For 80C investments you can attach the investment proof.
- For HRA you can submit rent receipt, etc.
- I am still not sure what proof to attach for 80TTA!
Section 143(1) Acknowledgement
After all the process is complete you get the following acknowledgement:
Disclaimer: Please remember this post is best to my understanding and I am not a tax expert. You might want to consult a qualified tax consultant or CA for your specific case!
To Conclude:
This action was initiated by income tax department as some tax payers misused the “proof not required while filing tax return” part and used to claim deductions they were not eligible for. For e.g. with more strict polices at employer end many people could not claim HRA with fake receipts as rent receipt without landlord PAN in not accepted. But they claimed while filing ITR as this is allowed. We all know there are a lot of genuine tax payers who are not able to claim HRA as landlords DO NOT share their PAN number. Also some tax payers took advantage of 80C without making actual investment.
The intent of income tax department was good – to weed out such events. But unfortunately as we have seen with mot government initiatives – the plan is good on paper but execution is very poor. Same is the case here.
Even tax helpline is NOT able to guide people and telling them to wait. Also this should be stated while filing returns and not sending a notice after that. This would badly hurt people who are not tech savvy and do not check emails frequently & this means a lot of housewives, senior citizens on pension income.
Also sending notice for Section 80TTA – deduction up to Rs 10,000 for interest earned in savings account is ridiculous because I do not understand what proof would be required for the same.
Also Read: 25 Tax Free Incomes & Investments in India
The e- Proceeding form has bugs and it adds income across rows – as shown above. The department has still not corrected these and neither sent further communication. On one hand they want more and more people to file returns by telling it’s simple and then bowl a googly by sending such notices. Hopefully the tax department is working on it and would create more awareness on how to reply to these notices or at the end its tax payer would be sufferer.
Corrections in my Query –
Please read Rs. 150000 in PPF and Rs. 9000 as interest accrued on S. B. A/c wherever it is mentioned.
I am sorry for the inadvertent mistake caused.
.
Mr. Amit
How to Respond to Notice u/s 143(1)(a)?
Thanks for your explicit explanation on the above subject. However, I have still two queries
.
(01) Amount paid/credited by deductor – You have suggested to put the amount from Form 16 for salary/pension & from 16A/26A for income from interest. My query is that my form 16 shows the complete pension for the F.Y. 2016-17 while 26 AS reflects the pension of two months only. In the concerned column of the Form for adjustments, which figure should I enter, either from F-16 or 26 AS,
(02) Income/Gross Receipts as per the Return – You have mentioned – Enter the amount after taking in account the above deductions. If it is done so, the resultant amount will not be the gross receipts, instead it will be the net taxable income. In the case under consideration, on the basis of the arbitrary values you have given for example, you have said, I would put Rs. 436160 i. e. (595156 – !59000). I feel that 595156 here might be gross or total income and 159000 might be an investment in PPF A/c and the balance amount of Rs. 9000 might have accrued as interest on saving account/s. If it is so, then 436160 will be the net income and not the gross income. Please comment on this aspect. In the same case that you have cited, if 159000 represents the deductions under 80 C and 9000 under 80TTA, is it expected to furnish the explanation in two separate rows.
The Head for salary is 17 and for other it is 56. May I know the source of these ?
I have a sanguine hope that you will be kind enough to answer these queries so that I can go ahead with the submission of my compliance regarding adjustments. Thanks a lot.
1. Use the amount which is correct – Form 16 would be better to use.
2. There are two fields – Amount paid/credited by deductor & Gross Receipts – which has to be same as per your suggestion. I think (and this is my personal interpretation) this should be after deducting eligible deductions – else whats the use of asking same info twice.
For schedules please use Google to search for “income from salary”, “income from other sources” etc – you’ll get the corresponding income tax sections
As for one or two row is concerned, its your call. My take is for 80TTA there is NO proof required and also there is no entry for the same in 26AS. Many people would not even have TAN etc of the bank. So taking all this in account (& no clarification coming from tax department) I would suggest one row if you do not have bank TAN details, else split in two.
The entire post is on “Best effort” basis and my understanding and I cannot guarantee everything would be correct here as there are NO guidelines from department yet and hence different people are having different opinion about the same!
Some tax experts says
Deduction made under Section – 192
Amount paid/credited by deductor – As per form 16 part a
Nature of receipt as per the deductor – salary
Income/Gross Receipts as per the return – write here taxable total income that is after deduction.
Head of Income/Schedule under which reported in the return – salary and other income
Reason – claimed in itr but not in form 16
Justification/Remarks – ?
is it correct Mr Amit? please advise
This is open ended with no guide from income tax department. So experts may have varying opinion. Its your call 🙂
Remember end of the day idea is to tell your assessing officer that you had made investment but was not shown in Form 16 due to some reason. So as per me do not worry much about technicalities. Anyway a normal person (including me) cannot be in Know how of these stuff!
Hi Amit,
I have long term capital gains plus dividend income which I had declared in ITR under exempt income. Now, I have got the 143(1) a notice. Could you please advise how to fill in the response ?
TAN – ?
Deduction Made Under Section – 10(38), 10(34)
Amount Paid/Credited by deductor – Total of Long Term capital gains + Dividend income
Nature of Receipt as per deductor – Capital Gains
Income/Gross Receipt as per Return – ??
Head of Income/Schedule under which reported in the return – 54
Reason – Income is Not Chargeable to Tax/Exempt
Justification/Remarks – Long term Capital Gains
Also, if we have 3 parts to dis agaree ( e.g 80G, 80TTA and Capital Gains) I guess we need to add 3 separate rows as the reasons are going to be different. What should be the Amount Paid/Credited by deductor and Income/Gross Receipt as per Return in each of these ?
I never thought about “exempted income” but I wonder what TAN you can fill! This is ridiculous.
I would suggest to leave TAN blank but if the form is not accepted put employers TAN here.
Income/Gross Receipts – should be 0 as this is not taxable! (this is guess – even I am confused about the same)
Hi Amit,
I see that ‘amount paid by deductor’ in form 26as is the total gross amount before deductions (hra and 80c submitted in form16) . In my case , hra and partial 80c is included in form 16. I had put remaining 80c savings in itr. So in this case , I should put ‘amount paid by deductor’ as gross income -(hra exemptions + partial 80c saving) or gross only?. Thanks in advance.
Regards,
Lakshmanan
Put gross income – hra- 80C
kindly let me to know to response the notice of u/s143(1)(a)
Returns filing exercise not yet over for many with CPC seeking clarifications – The Hindu Business Line –
http://m.thehindubusinessline.com/news/returns-filing-exercise-not-yet-over-for-many-as-cpc-seeks-further-clarifications/article9806692.ece
Finally media has started covering this. Its indeed a very bad step from income tax department.
This is reg. adjustment under section 143(1)(a) for mismatch in other income(bank interest). I had filed ITR for ay 17-18 in which forgot to add bank interest of 20538.00, Total TDS deposited for bank interest = Rs.2054/-.
Income/Gross receipt (GR)as per return Income/GR as per 16/26AS Variance Form used
0 20538 20538 16-other income
1346139 1366677 20538 16-Gross total income
1196140 1216677 20537 16-taxable total income
If I agree, 61613/- shall be added. and If I disagree, explanation is needed.
TAN No. – Bank or Employer?
DEDUCTION MADE UNDER SECTION – 80TTA?
AMOUNT PAID/CREDITED BY DEDUCTOR – Bank Interest? 20538/-
NATURE OF RECEIPT AS PER DEDUCTOR – other income?
INCOME/GR AS PER RETURN – 1346139/- (Gross total income as per F-16)
HEAD OF INCOME/SCHEDULE UNDER WHICH REPORTED IN RETURN – other income?
REASON – Deduction claimed in the return but not in F-16?
JUSTIFICATION
Please help.
If you forgot to add bank interest you should agree and file a revised return after paying taxes due.
Hi Sir,
In my case, as per 26AS, amount paid is Rs A (without considering HRA exemptions, though it is mentioned in form 16), Tax deducted is 0; Taxable income is Rs B (as per form 16, after considering exemptions and disclosed deductions). Now I have undisclosed investment of Rs C under 80C and Additional income of Rs D from interest and same being claimed under 80TTA. So total mismatch in deductions is of C+D.
Please advise for “AMOUNT PAID/ CREDITED BY DEDUCTOR” and “INCOME/GROSS RECEIPT AS PER RETURN” of response box for both deductions..
Seeking your response
Hi,
Most of tax payer got confused what need to fill on below details, Kindly help us……
TAN :
Deduction made under Section –
Amount paid/credited by deductor –
Nature of receipt as per the deductor –
Income/Gross Receipts as per the return –
Head of Income/Schedule under which reported in the return –
Reason –
Justification/Remarks –
Its already in post
As per Form 16 issued by my employer:
INCOME CHARGEABLE UNDER THE HEAD “SALARIES” : 1,234,567
Deduction under 80C: 150,000
Total Taxable income: (1234567 – 150000) = 1,084,567
———————————————————
Now, I have income from interest on savings bank accounts: 12,000
Hence in ITR1, I filed as below:
Income from Salary: 1,234,567
Income from Other Sources: 12,000
Gross Total Income: (1,234,567 + 12,000) = 1,246,567
Deduction under 80C: 150,000
Deduction under 80TTA: 10,000
Total Deduction: 160,000
Taxable Total Income: (1,246,567 – 160,000) = 1,086,567
———————————————————
Now, I have received a communication with mismatch of 10,000 in my total taxable income (only one row).
Income as per Return: 1,086,567
Income as per Form: 1,096,567
Proposed addition of income: 10,000
———————————————————
I decided to disagree with following answers:
TAN: TAN of employer
Deduction made under section: 80TTA
Amount paid/credited by deductor: 12,000
Nature of receipt as per the deductor: Other Income
Income/Gross Receipt as per return: 2,000
Head of Income/Schedule under which reported in the return: Other Income
Reason: Deduction claimed in return but not in form 16
Remarks: Rs 10,000 deduction claimed under 80TTA.
Attachment: Manually created excel file with breakup of Rs 12,000 interest credited by date and bank account.
– Is it correct ?
Thanks.
Yes and thanks for posting will help other readers too
Hi Amit Sir,
I also got email ‘adjustments 143 (1) (a)’
While filing original ITR1 i forget to add bank interest under ‘other income’ of 4550/-
Now e-proceeding has same 4550/- in two lines. I agree with my mistake i made. But if i ‘agree for addition’ now, it becomes 9100/- which is double of amount ( as you said its a bug in IT system ).
What should i do here then ?
Agree and file revised return
Agree both ?
Yes
Hi Amit,
I got Intimation 143(1) (a).
1. Variance 50000 – Deductions claimed in return but not in Form 16
2. Variance 50032- 29 Rs income and 7 Rs TDS mentioned in 26 AS form but not mentioned while filing return
I can response to first point by disagreeing and attaching saving proof.
But how can i response to second point.
Hello Amit,
I got notice in which Gross total income and taxable income claimed by IT as per form 16 are Rs. 1258500/- and Rs. 1108500/- where as per form 16 Part B issued by my employer shows these are Rs. 1058500/- and Rs. 901770/- respectively. Income tax department has not considered Rs. 2,00000/- claimed by me under loss from house property (its already there in form 16B issued by my employer) and 6730/- interest on saving bank accounts. What do you suggest, Should i only attach form 16 Part B issued by my employer or i need to attach interest certificates also which have been issued by my lending bank. Further, What should i mention under following head:
Deduction made under section:
Amount paid/credited by deductor:
Income/Gross receipt as per return:
Head of income/schedule under which reported in return
What reason should i select as Income tax department has not considered the deduction of Rs. 200000/- despite of it appearing in form 16B.
Attach Form 16 and reason – other. Justification – tax exemption already in Form 16
Hi Amit,
I have received a IT Intimation under Section 143(1)(a)., wherein IT department had wrongly included the following in my “Other Income”:
1. Rental Income :
2. TCS collected for Purchase of New car. The full value of Car on which 1% TCS was collected has been added in the “Other Income” in the intimation.
Kindly advise how do I respond to above intimation, particularly for Item 2, wherein an expense is erroneously considered as my income. When I select “disagree to the Addition”, I get the table to fill/respond. What should I fill under the box ” Head of Income/Schedule under which reported in the return.
I received the intimation under sec 143(1)(a) . It shows discrepancy between Form 16 and 26AS. But it was under Section 194IA. Actually i am the buyer of property and not the seller. And My builder used to pay tax. and I have already paid the tax amount to builder. Builder has provided the PAN number and not the TAN number. So how i should reply. As TAN number is mandatory.
Ask builder for TAN