What is the first thing I should do after filing my ITR?

After filing your ITR, you will receive an acknowledgement receipt. The most important next step is to verify your ITR, which can be done online through Aadhaar OTP, Net Banking, Demat Account, Bank Account, or offline by sending the signed ITR-V form to CPC Bangalore.

What happens if I don't verify my ITR?

If you don't verify your ITR within 30 days, your return will be considered invalid, and you will need to file it again.

What is an intimation notice u/s 143(1), and what should I do when I receive it?

An intimation notice u/s 143(1) is a summary from the Income Tax Department after processing your ITR, detailing income, deductions, tax calculation, and any discrepancies. You should carefully review it, compare it with your filed ITR, and if you disagree with the notice, file a rectification request.

How will I receive my income tax refund (if applicable)?

If you are eligible for a refund, it will usually be credited directly to your pre-validated bank account. Ensure your bank details are accurate on the e-filing portal to avoid delays.

What can cause a delay in receiving my income tax refund?

Several factors can delay your refund, including incorrect bank details, an unverified ITR, outstanding tax demands from previous years, or if your ITR is selected for scrutiny assessment.

ITR Filed: What Happens Next? A Post-Filing Deep Dive

ITR Filed: The Journey After Submission

Filing your Income Tax Return (ITR) is a vital responsibility for every taxpayer. Even so, many believe that their task ends once they click the 'submit' button. In reality, the process has only just begun. Post-filing, a series of steps are initiated by the Income Tax Department to make sure accuracy, compliance. Also, fairness. This article provides a detailed look at what happens after you file your ITR, helping you understand the subsequent stages and potential outcomes.

1. Acknowledgement and ITR-V Verification

In fact, You see, Immediately after successfully filing your ITR, you'll receive an acknowledgement receipt. This confirms that the department has received your return. The next key step is verification. You need to verify your ITR to complete the filing process. We have several ways to do this:

Aadhaar OTP: The most convenient method is through Aadhaar OTP. If your Aadhaar is linked to your mobile number, you can generate an OTP and use it to verify your return online.
Net Banking: Many banks offer the option to e-verify your ITR through their net banking portals.
Demat Account: Verification can also be done through your Demat account.
Bank Account: Similar to Demat, you can verify using pre-validated bank account details.
Offline (ITR-V): If you prefer the traditional method, you can download the ITR-V form, sign it. Also, send it to the Centralized Processing Centre (CPC) in Bangalore via ordinary post.

Important Note: Verification is mandatory. If you don't verify your ITR within 30 days (reduced from 120 days previously), your return will be considered invalid. Also, you'll have to file it again.

2. Processing of ITR by the Income Tax Department

Once you've verified your ITR, the Income Tax Department initiates the processing. This involves a series of checks and validations to make sure the accuracy and completeness of the information you've provided. The key steps in the processing include:

Initial Scrutiny: The system performs an initial check for any apparent errors, inconsistencies, or missing information.
Data Matching: The information provided in your ITR is matched with data available from other sources, such as Form 26AS (now replaced by AIS), TDS returns filed by your employer or other deductors. Also, information received from banks and financial institutions.
Calculation of Tax Liability: The department recalculates your tax liability based on the income declared and deductions claimed.
Finding of Refund or Demand: Based on the calculations, the department determines whether you are eligible for a refund or if there's any outstanding tax demand.

3. Intimation u/s 143(1)

You see, After processing your ITR, the Income Tax Department sends you an intimation notice under Section 143(1) of the Income Tax Act. This notice summarizes the result of the processing and highlights any discrepancies between your filed return and the department's calculations. The intimation notice usually includes the following:

Summary of Income: A summary of the income declared in your ITR.
Deductions Claimed: Details of the deductions claimed by you.
Tax Calculation: The tax liability calculated by the department.
Refund or Demand: Whether you are eligible for a refund or if we have any outstanding tax demand.
Discrepancies (if any): A detailed explanation of any discrepancies found during processing.

What to do when you receive an intimation u/s 143(1):

Review Carefully: Carefully review the intimation notice and compare it with your filed ITR.
Identify Discrepancies: Identify any discrepancies between your return and the department's calculations.
Take Action: If you agree with the intimation notice, no further action is required. If you disagree, you can file a rectification request (discussed below).

4. Income Tax Refund (If Applicable)

If the processing of your ITR results in a refund, the Income Tax Department will start the refund process. The refund is usually credited directly to your bank account, provided you have pre-validated your bank account details on the e-filing portal. The time taken to receive a refund changes depending on depending on different factors, including the processing time, the accuracy of your bank account details, and any pending issues with your ITR.

So, Factors Affecting Refund Processing Time:

Accuracy of Bank Details: Incorrect or outdated bank account details can delay the refund process.
Verification Status: Unverified ITRs will not be processed for refunds.
Outstanding Tax Demands: If you have any outstanding tax demands from previous years, the refund may be adjusted against those demands.
Scrutiny Assessment: If your ITR is selected for scrutiny assessment, the refund may be delayed until the assessment is completed.

5. Rectification u/s 154

Here's the thing: If you notice any errors or discrepancies in the intimation notice u/s 143(1), or if you believe that the department has made a mistake in processing your ITR, you can file a rectification request under Section 154 of the Income Tax Act. This allows you to correct any factual or clerical errors in your return.

So, Common Reasons for Filing Rectification:

Incorrect Income Details: Errors in reporting income from different sources.
Incorrect Deduction Claims: Mistakes in claiming deductions under different sections of the Income Tax Act.
Incorrect Tax Payments: Errors in reporting tax payments made.
Mismatch in TDS/TCS Credits: Discrepancies between the TDS/TCS credits claimed in your ITR and the information available with the department.

How to File a Rectification Request:

Log in to the e-filing portal.
Go through to the 'e-File' section and click on 'Rectification'.
Select the assessment year for which you want to file the rectification.
Provide the reason for rectification and the details of the errors you want to correct.
Submit the rectification request along with any supporting documents.

6. Scrutiny Assessment

Sometimes, the Income Tax Department may select your ITR for scrutiny assessment. This means that your return will be subjected to a more detailed examination to verify the accuracy and completeness of the information provided. Scrutiny assessments are usually conducted to identify cases of tax evasion, underreporting of income, or incorrect claims of deductions.

Types of Scrutiny Assessment:

Limited Scrutiny: This involves a limited examination of specific aspects of your ITR.
Complete Scrutiny: This involves a complete examination of all aspects of your ITR.

What to Expect During Scrutiny Assessment:

Notice from the Department: You will receive a notice from the Income Tax Department informing you that your ITR has been selected for scrutiny assessment.
Submission of Documents: You will be required to submit different documents and information to support the claims made in your ITR.
Appearance Before the Assessing Officer: You may be required to appear before the Assessing Officer to explain your case and provide additional information.
Assessment Order: After reviewing the documents and information, the Assessing Officer will pass an assessment order determining your final tax liability.

7. Notices from the Income Tax Department

Apart from the intimation u/s 143(1) and scrutiny notices, you may also receive other notices from the Income Tax Department for different reasons, such as:

Notice for Demand u/s 156: This notice is issued when we have an outstanding tax demand against you.
Notice for Non-Filing of ITR u/s 142(1): This notice is issued if you have not filed your ITR within the due date.
Notice for Information u/s 133(6): This notice is issued to seek information from you regarding your income, expenses, or investments.

In fact, Responding to Notices:

So, In fact, It is key to respond to any notices received from the Income Tax Department promptly and accurately. Failure to respond or providing incorrect information can result in penalties and legal consequences.

Conclusion

Filing your ITR is just the first step in the tax compliance process. Understanding what happens after filing, including processing, refunds, scrutiny. Also, notices, is essential for ensuring compliance and avoiding potential issues. By staying informed and taking appropriate action when required, you can handle the post-filing world with confidence.