What is Intimation under section 143(1) of the income tax act?

Intimation Under Section 143(1) of the Income Tax Act

An intimation under Section 143(1) of the Income Tax Act is a notice issued by the Income Tax Department to taxpayers after processing their income tax returns. It essentially summarizes the tax department’s assessment of your return and any adjustments made to your tax liability.

Why do you receive a 143(1) intimation?

You may receive a 143(1) intimation for various reasons, including:

  • Arithmetical Errors: If the tax department identifies any calculation mistakes in your return.
  • Incorrect Claims: If you have claimed deductions or exemptions that are not eligible or are not supported by sufficient documentation.
  • Disallowance of Losses: If you have claimed losses from a previous year’s return that was filed late.
  • Disallowance of Expenditures: If you have claimed expenses that are not allowable under the Income Tax Act.
  • Incorrect Tax Calculation: If the tax department calculates your tax liability differently than you did.

What to do when you receive a 143(1) intimation?

  1. Review the Intimation Carefully:
    • Check for any discrepancies or errors in the calculations or information provided.
    • Ensure that the tax department has correctly considered all your deductions and exemptions.
  2. Verify the Adjustments:
    • If you disagree with any adjustments made by the tax department, you can file a response or objection within the specified time limit.
    • You may need to provide additional documentation to support your claims.
  3. Pay Any Additional Tax Due:
    • If the intimation indicates that you owe additional taxes, you must pay them within the specified deadline.
  4. Claim Your Refund:
    • If the intimation indicates a tax refund, you will receive it automatically, or you may need to file a refund claim.

Important Note:

It’s crucial to respond to a 143(1) intimation within the specified time frame. Failure to do so may result in penalties or legal actions.

If you have any specific questions or concerns regarding a 143(1) intimation, please do get in touch with us at info@bhashashaadvisors.com

Is TDS applicable on payment done to partners?

The Union Budget 2024 introduced a significant change in the tax landscape for partnership firms. Effective from April 1, 2025, partnership firms are now required to deduct Tax Deducted at Source (TDS) on payments made to their partners. This change is designed to enhance tax compliance and ensure timely tax collection.

Key Points to Remember:

  • Threshold Limit: TDS is applicable only if the total amount paid to a partner in a financial year exceeds Rs. 20,000. This means that if the total payments to a partner, including salary, remuneration, commission, bonus, and interest, are less than Rs. 20,000, TDS is not required.
  • TDS Rate: The standard TDS rate is 10%. However, the rate may vary depending on certain factors like the partner’s tax residency status and the nature of the payment.
  • Time of Deduction: TDS must be deducted at the time of payment or credit to the partner, whichever is earlier. This ensures that the tax is collected promptly.
  • Applicable Payments: TDS is applicable on various types of payments made to partners, including salary, remuneration, commission, bonus, and interest.

Important Considerations:

  • Cash Payments: While TDS is mandatory on payments to partners, the Partnership Act does not impose any restrictions on making cash payments to partners. This means that partnership firms can still pay their partners in cash, subject to other legal and regulatory requirements.
  • Tax Compliance: It is crucial for partnership firms to maintain accurate records of payments made to partners, including the TDS deducted and deposited with the tax authorities. Proper documentation is essential for compliance purposes and to avoid potential penalties.

What is the PAN 2.0 QR based PAN card?

PAN 2.0 is an upgraded version of the Permanent Account Number (PAN) system in India. It aims to modernize the PAN card system and make it more efficient and user-friendly. One of the key features of PAN 2.0 is the introduction of QR codes on PAN cards.  

Key features of PAN 2.0:

  • QR Code: The new PAN cards will have a QR code that can be scanned to verify the PAN details quickly and securely. This will help in various applications, such as online transactions, KYC verification, and tax filing.  
  • Unified Digital Portal: A unified digital portal will be created for all PAN/TAN services, making it easier for taxpayers to access and manage their information online.  
  • Enhanced Security: The PAN 2.0 system will have improved security measures to protect taxpayer data and prevent fraud.  
  • Paperless Processing: The government aims to make the entire PAN system paperless, reducing the need for physical documents and promoting environmental sustainability.  

Benefits of PAN 2.0:

  • Faster and Easier Verification: The QR code on the PAN card will enable faster and more efficient verification of PAN details.  
  • Improved Security: Enhanced security measures will protect taxpayer data and prevent identity theft.  
  • User-Friendly Portal: The unified digital portal will provide a seamless experience for taxpayers to access and manage their PAN information.  
  • Eco-Friendly: The paperless processing will reduce the environmental impact of the PAN system.  

It’s important to note that the existing PAN cards will remain valid during the transition to PAN 2.0. The government will provide a phased rollout for the new PAN cards with QR codes.