What a 143(1) intimation actually is
When you file a return, it is processed automatically at the Centralised Processing Centre. The intimation under Section 143(1) is the result of that processing. The system recomputes your income and tax from the figures you reported, cross-checks them against Form 26AS, the Annual Information Statement (AIS) and the tax actually deposited in your name, and sends back one of three outcomes: a refund, a nil position, or a demand.
This is not a scrutiny notice. It does not mean an officer has examined your affairs or formed a view that something is wrong. It is a reconciliation, run by software, and the figure it shows is only as good as the data it matched against. When that data is incomplete or the return claimed something the system couldn't read — a treaty rate, a credit — the intimation throws up a demand or trims the refund.
The intimation is laid out in two columns: "as provided by you in the return" against "as computed under Section 143(1)". Reading those two columns side by side is how you find what the system changed. The fix follows from the line that differs, not from the bottom-line demand.
Why an NRI return usually mismatches
For non-residents, a handful of causes account for most 143(1) demands and cut refunds. The pattern is almost always a gap between what you claimed and what the system could see.
| What shows on the intimation | The usual cause |
|---|---|
| Tax demand on interest or dividends | DTAA treaty rate not accepted; taxed at the 30% / 20% default |
| Refund cut to part of what you claimed | TDS credit claimed doesn't match Form 26AS / AIS |
| Income added that you didn't report | An AIS entry (a sale, interest) the return missed |
The treaty-rate case is the most common and the most worth fixing. If you applied your country's lower rate on NRO interest or dividends but the return didn't carry the supporting detail the system expects — the treaty article, residency proof, Form 67 where foreign tax credit is involved — the processing falls back to the full domestic rate and a demand appears. The TDS-credit case is usually a timing or PAN-linking gap: tax was deducted but hasn't landed against your PAN in 26AS yet, so the credit is disallowed. Both are correctable, but only through the right reply.
Rectification (Section 154) or "disagree with demand" — which reply
There are two distinct ways to respond, and using the wrong one wastes the window.
A rectification request under Section 154 is for a mistake apparent from the record — a TDS credit that is clearly in 26AS but wasn't given, an arithmetical slip, a figure the system mis-picked. You file it on the portal against the specific intimation, point to the exact line, and the same processing unit corrects it.
The "disagree with demand" response is the route when a demand has been raised and you are contesting it — for instance, the treaty rate should apply and you are submitting the basis. You select "disagree" (in full or in part) on the portal's outstanding-demand screen and attach your explanation and proof, rather than simply paying.
Getting this choice right matters. A treaty-rate dispute filed as a bare rectification can be rejected because the original return lacked the detail; the same point, raised as a reasoned disagreement with the demand and backed by documents, holds up. A CA looks at which line moved and picks the reply that actually addresses it.
A worked example — Anjali's refund cut to nothing
Anjali, an NRI in Singapore, filed her return claiming a refund of about ₹1.05 lakh — TDS of roughly ₹2.1 lakh had been cut on her NRO fixed-deposit interest at 30% (on about ₹7 lakh of interest), and on the India–Singapore treaty rate of 15% her actual liability was closer to ₹1.05 lakh. The 143(1) intimation came back with a refund of only ₹20,000 and no treaty benefit.
Reading the two columns showed what happened: the system had ignored the 15% treaty rate and taxed the interest at 30%, then allowed only the part of the TDS that reconciled cleanly with 26AS. The rest of her claimed credit was sitting against a slightly different PAN-linking on one deposit and hadn't matched.
The reply had two parts. The treaty-rate point went in as a "disagree with demand / refund" response, with her Tax Residency Certificate and Form 10F supporting the 15% rate. The unmatched TDS went in as a rectification under Section 154, pointing to the deposit and the corrected 26AS entry once the bank refiled. Once both were accepted, the refund was restored close to the original ₹1.05 lakh figure. The numbers here are illustrative; the route — separate the treaty point from the credit point — is what the case turned on.
The deadline, and what happens if you miss it
The intimation states a period within which to respond — read that date off your own notice rather than assuming a standard one, because it varies with the type of response and the cycle. Treat it as a hard date.
If the window passes without a reply, the demand doesn't disappear. It becomes an outstanding demand on your portal account, and the department can recover it — most commonly by setting it off against a future refund under Section 245, which is a separate process covered on our related page on refunds adjusted against a demand. A rectification under Section 154 can still be filed later for a genuine apparent error, but contesting the substance of the demand is far cleaner inside the original window than after recovery has started.
If you have already missed it and a refund is now being held back, the position is recoverable but the steps differ — that is the Section 245 route, not this one.