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The Income Tax Department processes the income tax return only after they are filed and successfully verified by the taxpayer. The taxpayers are advised to submit their return on time for the speedy processing of the returns.

Let’s discuss in details about the ITR processing: 

  1. Income tax return filing
  2. ITR verification
  3. ITR processing under section 143(1)
  4. Status post the ITR processing

1. Income tax return filing

The taxpayers should file their income tax returns by the due date to avoid any late fees and the penalty. The ITR processing starts only with the filing of the return; it can be on time or after the due date. However, it is also advisable to file the returns on time for quick processing.

2. ITR verification

The department starts the Income Tax Processing only when the return has been successfully verified. The taxpayer has to verify the return by sending the ITR-V (Acknowledgement) after signing it with a blue ink within 120 days from the date of filing the return. ITR-V will be physically sent to the Central Processing Center (CPC). Once they receive it, CPC will send an acknowledgement on the registered email ID of the taxpayer.

The taxpayer should correctly mention the email address in the return form as all the communications between him, and the department will take place through that email ID alone.

Also, the taxpayer can e-verify the return after filing it instead of sending the acknowledgement physically to the department. It can be done through any one of the following means:

(a) net banking
(b) aadhaar OTP
(c) EVC code through the department’s website
(d) giving bank account details on the e-filing website
(e) giving DEMAT account details on the income tax e-filing website.

3. ITR processing under section 143(1)

After the verification of the ITR, the department processes the income tax return and sends the intimation under Section 143(1) of the Income Tax Act, 1961 once the Income Tax Processing is done. The intimation will be sent via an email along with a message to the registered email ID and the mobile number respectively.

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 in addition to the records available with the CPC and generates an intimation under section 143(1). The intimation also carries the detailed calculation of the tax as computed by the taxpayers and the income tax department. The whole process generally takes 30- 45 days from the day of e-verification or the receipt of ITR-V by the CPC.

4. 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 :

a. Refund determined: If the return filed by the taxpayer is found to be accurate and has a refund claim, the refund is issued to the taxpayers. Generally, the credit of refund process takes about 20-45 days from the date of e-verification of the income tax return. However, if the acknowledgement has been sent physically to the CPC, it may take a longer time.

b. Demand determined: If any discrepancy is found in the taxes paid or the credit claimed, the department issues a demand intimation. The demand has to be paid within a stipulated time mentioned in the intimation under section 143(1).

c. No demand No refund: The situation where the department accepts the information provided by the taxpayer and gives a green card then the status of the ITR processing turns to ‘No demand No refund’. It means there is no interest or tax payable or refundable by/to the assessee.

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