Intimation under 143(1): How to Read Demand or Refund Adjustment

An intimation is a line-by-line processing result. The first question is not ‘pay or appeal?’ but ‘what changed from the filed return?’

What the taxpayer should understand

• The Income-tax Act, 2025 took effect on 1 April 2026. FY 2025–26 and AY 2026–27 remain governed by the Income-tax Act, 1961, including the notified AY 2026–27 ITR forms. Tax year 2026–27 beginning 1 April 2026 is governed by the 2025 Act and the Income-tax Rules, 2026. Legacy section numbers and forms should therefore be used only for the period to which they legally apply.
• AY 2026–27 intimations remain under the 1961 Act processing framework even if issued after 1 April 2026.
• The intimation compares return figures with CPC-processed figures and identifies adjustments and tax computation.
• Tax-credit mismatch, arithmetical errors, inconsistent claims and specified return information can create demand or reduced refund.
• A proposed prima facie adjustment may have a response opportunity before final processing.
• After final intimation, the remedy may be payment, demand response, rectification or appeal depending on the error.

Use the ITR Form Selector — AY 2026–27 to work through the related inputs before acting.

The five-point review

For the connected rule, example or next step, see Tax Refund Failure: Bank Validation, Demand Adjustment and Reissue Pack.

Practical example

For the connected rule, example or next step, see Tax Refund Held Due to Bank Validation or Demand.

How to apply the framework

Create a returned-versus-processed comparison by line.

Do not select ‘demand is correct’ merely to access payment if the liability is disputed; the portal warns that the response can become irreversible.

Filing-control workflow

Fix the tax period and statutory route

Identify the financial year, assessment year or tax year before using any threshold, form or section. Review return, adjustment and tax together. A form filed in June 2026 for AY 2026–27 remains an old-Act filing, while an event occurring after 1 April 2026 can fall under the new Act.

Reconcile the commercial evidence

Start from contracts, invoices, bank statements, payroll, broker records, property documents and statutory certificates. Then reconcile AIS, TIS, Form 26AS, ITR schedules, tax payments and prior returns. Portal information can contain gross values, timing differences or reporting errors and should not replace primary evidence.

Test the live filing result

Review validation messages, selected regime, form acknowledgements, loss schedules, tax-credit matching and processed intimation. Preserve the filed JSON or form, computation, supporting schedules, transaction IDs and any correction request. A saved draft or payment debit is not proof that the statutory task is complete.

Implementation checkpoint

Before treating the filing step as complete, verify the live portal or processed outcome. Confirm the form and regime, taxable income, losses, tax credit, payment mapping, deduction schedule and acknowledgement. Record any remaining mismatch, responsible person and correction deadline. This check prevents a technically submitted return from preserving the wrong tax result.

Action checklist

• Download the intimation.
• Compare every changed line.
• Reconcile tax credit and payments.
• Identify factual versus legal error.
• Choose demand response/rectification/appeal.
• Preserve submission and payment.

Evidence to keep

• Filed ITR and computation
• Intimation
• Form 26AS/AIS
• Challans and deduction proofs
• Demand/rectification response

Warning signs

Finin2min takeaway