Section 270, Income-tax Act 2025: Assessment and the return-processing intimation

What changed when the 143(1) intimation became Section 270(1)?

Nothing you can feel. The intimation is the same document, generated the same way by the Centralised Processing Centre; only its address in the statute changed. What was Section 143(1) of the 1961 Act is now sub-section (1) of Section 270 in the Income-tax Act 2025. The section itself is titled 'Assessment' and is broader than the intimation: its opening sub-sections handle the automated processing you receive after every return, and its later sub-sections (270(8) onward) hold the scrutiny assessment that only a small minority of returns ever face.

Two companion provisions moved with it, and you meet them the moment an intimation raises a demand or you need to fix one. The notice of demand, once Section 156, is now Section 289. The rectification route for a mistake apparent from the record, once Section 154, is now Section 287. The late-filing fee that processing so often adds, once Section 234F, is Section 428, and the interest on a late return, once Section 234A, is Section 423.

The Act also speaks in 'tax years' rather than the old pair of 'previous year' and 'assessment year'. Income earned in the year to 31 March 2027 is the return for tax year 2026-27, and its intimation must reach you within nine months of the end of the financial year in which you filed it.

The successor numbering (Section 270 for the intimation, Section 287 for rectification, Section 289 for the notice of demand) is cross-checked against published copies of the enacted Act.†

The three things a 143(1) intimation can say

An intimation always resolves to exactly one of three outcomes. Read the last line first, because that line, refund or demand or neither, decides whether you do anything at all.

• No demand and no refund. Your tax paid matches the department's computation, so nothing changes hands. Where there is no adjustment and no sum payable or refundable, the acknowledgement of your return is itself deemed to be the intimation (Section 270(5))†, and a separate PDF may never arrive.
• A refund. You paid more than your final tax, almost always because TDS or advance tax overshot. The refund is credited to your pre-validated bank account, together with interest for the months you waited.
• A demand. The computation found less tax paid than due. The usual triggers are a TDS credit your Form 26AS does not show, a claim disallowed as incorrect, or a late-filing fee. A notice of demand under Section 289 accompanies it, and the clock to pay or contest it starts running.

A refund or a demand of even one rupee still counts as an intimation. Getting one is routine; it is the content, not the arrival, that matters.

How to open and read the intimation

The PDF is password-protected. The password is your PAN in lower case followed by your date of birth in DDMMYYYY form, run together with no space. For PAN AAAAA1234A and a date of birth of 1 January 1990, the password is aaaaa1234a01011990.

Inside, the intimation sets your figures beside the department's in two columns: one headed with what you reported in the return, the other with what was computed under Section 270(1). Every line of your tax computation appears twice, so reading it is a matter of running your eye down the two columns and stopping at the first row where the numbers differ. That row is the reason for your refund or demand.

In the example below, everything agrees until the TDS line. You claimed ₹85,000 of tax deducted at source, but only ₹73,000 of it appears in the department's records, so processing allows the lower figure. That single ₹12,000 gap turns a return you filed expecting a ₹5,000 refund into a ₹7,800 demand once short-payment interest is added.

The two-column layout is the heart of the document. If every row matches, the intimation is a formality; the story is always in the first line that does not.

Which corrections processing can make, and which it cannot

Processing is not a free-form review. It can only make a short, defined set of adjustments to the income or loss you declared, most of them corrections of errors apparent from the return itself, with one reaching across to an inconsistency against a return you filed for an earlier year. Under Section 270(1)(a) the total income or loss is adjusted for:

• Any arithmetical error in the return.
• An incorrect claim that is apparent from the information in the return, for example a deduction that exceeds a stated cap.
• An inconsistency in the return set against the information in a return you filed for a preceding tax year, of a kind the rules prescribe.
• A loss claimed for carry-forward where the return was filed after the due date.
• An expenditure or an increase in income shown in the audit report but not carried into the return.
• A Chapter VIII-C deduction claimed in a return filed after the due date, where timely filing is a condition of the deduction.

The six permitted adjustments are drawn from the text of Section 270(1)(a) in published copies of the enacted Act.†

The 30-day rule, and what processing cannot do

Before any adjustment is applied, Section 270(2) requires the department to send you an intimation of the proposed adjustment, in writing or on the portal, and to consider your reply. If you do not respond within 30 days of that proposal, the adjustment is made anyway. This is the 30-day window people mean when they say a demand is 'treated as accepted': silence is read as agreement, so a proposal you never open becomes a demand you never contested.

Note, too, what is not on the list. Processing cannot add income it merely suspects you left out. The old clause that let it add income appearing in Form 26AS is not carried into Section 270. A gap between your return and your Annual Information Statement is a matter for scrutiny, not for automated processing, so an AIS mismatch on income alone will not produce a 143(1) demand for extra income. What processing can do is restrict the tax credits you claimed to what the records actually show, which is a different thing and the far more common one.

The 30-day proposed-adjustment rule and the limits on processing are drawn from the text of Section 270(2) in published copies of the enacted Act.†

Why an intimation shows a demand: the common causes

Most 143(1) demands come from a handful of mismatches, and nearly all of them are avoidable at the filing stage. If your intimation raises a demand, it is almost certainly one of these:

• A TDS or TCS credit mismatch. You claimed more deducted tax than your Form 26AS shows, usually because a deductor filed its return late or quoted the wrong PAN. Processing allows only what the records reflect.
• A challan or advance-tax mismatch. Self-assessment or advance tax you paid has not matched to your PAN and assessment year, so the payment is not credited.
• A disallowed deduction. A deduction was claimed but is not supported by the return, exceeds its cap, or does not match your Form 16.
• The late-filing fee under Section 428. File after the due date and processing adds ₹5,000 (₹1,000 where total income is ₹5 lakh or less), even when your tax is otherwise fully paid.
• Interest. Unpaid tax carries interest under Section 423 (old Section 234A) for filing late, and Sections 234B and 234C for advance-tax shortfalls, all of which processing computes for you.

The single commonest cause is the TDS credit mismatch. It is also the easiest to prevent: reconcile your claimed TDS against Form 26AS before you file.

Got a demand? Revised return, rectification, or pay

You have three routes, and picking the right one turns on whose mistake it is. Respond on the e-filing portal under Pending Actions, then Response to Outstanding Demand, where you can agree with the demand or disagree and give reasons.

If you agree, pay within 30 days against the notice of demand under Section 289. Paying inside that window keeps recovery interest of 1% a month from starting to run.† If the mistake is your own, a missed income or a wrong figure, the fix is a revised return under Section 263(5), not a rectification, and only while the revised-return window is open. If the mistake is in the processing itself, a TDS credit your Form 26AS does show but the intimation left out, or an arithmetic slip at the department's end, the fix is a rectification under Section 287, which corrects a mistake apparent from the record. An appeal is the last resort, for a genuine dispute that rectification cannot settle.

Disagreeing online does not by itself cancel the demand; it flags your objection. The demand stands until a rectification, a revised return or an appeal actually changes it, so start that process rather than only marking 'disagree'.

Getting your refund, and the interest on it

If the intimation shows a refund, it is credited straight to the bank account you have pre-validated on the portal, so validate the account before you expect any money. A refund cannot be paid to an unvalidated account, and a failed credit is the most common reason a refund shown in the intimation does not land.

The refund carries interest for the delay under the old Section 244A rule, at 0.5% a month, running broadly from 1 April of the assessment year to the date it is granted.† If a refund does not arrive after the intimation, raise a refund reissue request on the portal once the bank account is validated. And a refund can be smaller than the intimation suggests if the department first sets it off against an older outstanding demand of yours, which it may do after giving you notice.

Interest the department pays you on a refund is itself taxable as income from other sources in the year you receive it.

Is this the same as a scrutiny notice? No

The 143(1) intimation is automated processing that every return goes through. Scrutiny is a separate, human examination that only a small minority of returns face, and it runs under a different sub-section: Section 270(8)† (old Section 143(2)). The two are easy to tell apart. The intimation reconciles arithmetic and tax credits and arrives for everyone; a scrutiny notice asks you to produce evidence and explain entries, and it can be issued only within three months of the end of the financial year in which you filed (Section 270(9))†.

An intimation is also not an assessment order. It does not sit in judgement on whether your income is correct; it accepts your return and fixes only apparent errors. That is why, where nothing needs changing, the acknowledgement is simply deemed to be the intimation under Section 270(5) and no separate order is passed.

Receiving a 143(1) intimation does not mean scrutiny will follow. The two are independent, and the vast majority of intimations close a return rather than open an inquiry.

The nine-month clock and the two 30-day windows

Three deadlines govern the intimation, and confusing them is a common and costly mistake:

• Nine months to process. No intimation can be sent after nine months from the end of the financial year in which the return is filed (Section 270(4))†. Miss that and the return is accepted as filed, the acknowledgement standing in as the intimation.
• Thirty days to answer a proposed adjustment. When processing proposes to adjust your income under Section 270(1)(a), you have 30 days from that proposal to respond (Section 270(2)); no response means the adjustment is made.
• Thirty days to pay a demand. Once a notice of demand under Section 289 is served, you have 30 days to pay before recovery interest at 1% a month begins to accrue.†

The two 30-day windows do different jobs. One is your chance to stop an adjustment before it happens; the other is your chance to pay a demand before it starts costing interest.

What to do the day the intimation arrives

Open it the day it lands, read the last line first, and act on it inside 30 days. What that action is depends on the outcome.

If it says no demand and no refund, you are done: file it away. If it shows a refund, confirm your bank account is pre-validated, and if the money does not arrive within a few weeks, raise a refund reissue. If it shows a demand, never ignore it, however small. An unpaid 143(1) demand runs interest of 1% a month and is set off against your next refund, so a ₹40,000 demand left for a year quietly costs about ₹4,800 in avoidable interest before any refund you were expecting is docked to clear it.†

The best move, though, is prevention. The single commonest cause of a 143(1) demand is claiming TDS that your Form 26AS does not yet show, and it happens because deductors file their statements late. Before you file, reconcile your claimed TDS against both Form 26AS and your Annual Information Statement. Waiting until the fourth-quarter TDS is fully reflected, usually by mid-June, removes most demands before they can be raised.

Reconciling TDS against Form 26AS before filing is the highest-value ten minutes in the whole process: it prevents the mismatch that causes most intimation demands.

Worked examples

Section 270 FAQs