Income Tax Return Processing

Income tax return filed is processed by the CPC – Central Processing Centre. Presently, CPC in Bangalore is responsible for carrying out all primary assessments. The Income Tax Department processes the income tax returns only after they are filed and successfully verified by the taxpayer. Timely submission of ITRs is advised for faster processing by the department.

The CPC unit of the Income tax department takes up the ITR for processing and sends an intimation notice under Section 143(1) to the registered email address confirming that the ITR is processed. This notice will specify the tax amount payable or the refund due as per the income tax department.   

Income Tax Return Filing and ITR Verification

To avoid late fees and penalties, taxpayers must submit their income tax returns within the deadline. The returns will be processed once you file and verify your ITR, whether before or after the due date. Nevertheless, it is recommended to file the returns promptly for faster processing.

The department starts the Income Tax Processing only when the return has been successfully verified. You may either e-verify your ITR or send it the ITR-V to CPC, Bangalore within 30 days from the date of filing the return. 

ITR Processing under Section 143(1)

Once the Income Tax Return (ITR) is verified, the department proceeds to process it and sends an intimation under Section 143(1) of the Income Tax Act, 1961. This intimation, along with a message, is sent via email to the registered email ID and mobile number provided. 

Example: ITR for AY 2024-25 and PAN abcxxxxx1r have been processed at CPC. Intimation u/s 143(1) has been sent to your registered email ID. If not received, check the SPAM folder.

CPC processes each e-filed return and generates intimation u/s 143(1). The department compares the data provided in the return by the taxpayer and the records available with the CPC and generates an intimation under section 143(1). 

The intimation also includes a detailed tax computation of the tax as per the taxpayers and the income tax department. The whole process generally takes 20-45 days from the day of e-verification or the receipt of ITR-V by the CPC.

Status Post the ITR Processing

Taxpayers are required to decode the ITR intimation. Following are three possible scenarios that the taxpayer may need to understand :

• Refund determined: If the return filed by the taxpayer is found to be accurate and has a refund claim, the refund will be issued to them. Typically, the refund process takes around 20-45 days after the e-verification of the income tax return. However, if the acknowledgement has been sent physically to the CPC, it may take longer.
• Demand determined: This means additional tax is payable. The tax department sends a demand intimation if there are any discrepancies in the taxes paid or credits claimed. The taxpayer is required to pay the demand within the specified time mentioned in the intimation under section 143(1).
• No demand-No refund: When the department approves the information given by the taxpayer, the intimation will be 'No demand No refund.' This indicates that the taxpayer does not owe any taxes or interest, and there is no refund owed to the taxpayer.