Section 270 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 270 deals with what happens to a return after it is made. It sets out how the return is processed, which adjustments are allowed before an intimation is sent, the time limit for that intimation, and the separate route of a notice followed by a regular assessment. This article explains the section as per the Income-tax Act, 2025 as amended by the Finance Act, 2026. Later amendments, the Income-tax Rules, 2026 and notifications should be checked separately.
A return under section 263 (or in response to a notice under section 268(1)) is processed under sub-section (1): six kinds of adjustment, then tax, interest and fee are computed, credits are set off and an intimation is sent. The assessee must be given a communication first and thirty days to respond (sub-section (2)). No intimation is sent after nine months from the end of the financial year in which the return is made (sub-section (4)). Separately, a notice under sub-section (8) leads to an assessment order under sub-section (10); the notice cannot be served after three months from the end of the financial year of the return (sub-section (9)). The Finance Act, 2026 omitted the words "under section 144 or" in sub-section (1)(a)(vi), w.e.f. 1-4-2026.
Sub-section (1): processing of the return
Where a return has been made under section 263, or in response to a notice under section 268(1), it is processed as follows.
(a) Adjustments to total income or loss. The total income or loss is computed after making adjustments for:
- any arithmetical error in the return;
- an incorrect claim, if the incorrect claim is apparent from any information in the return;
- any inconsistency in the return with the information in the return of any preceding tax year, as may be prescribed;
- disallowance of loss claimed, if the return of the tax year for which set-off of loss is claimed was furnished beyond the due date under section 263(1);
- disallowance of expenditure or increase in income indicated in the audit report but not taken into account in computing the total income in the return; and
- disallowance of deduction claimed under any provision of Chapter VIII-C, if the return is furnished beyond the due date under section 263(1).
The words "under section 144 or" were omitted from item 6 by the Finance Act, 2026, w.e.f. 1-4-2026. The detail of the inconsistency in item 3 is left to the Income-tax Rules, 2026.
(b) and (c) Tax, interest, fee and credits. Tax, interest and fee, if any, are computed on the total income so computed. The sum payable by, or the refund due to, the assessee is then determined after adjusting tax deducted at source, tax collected at source, advance tax, rebate or relief under Chapter IX, tax paid on self-assessment and any amount paid otherwise by way of tax, interest or fee. Self-assessment is explained in section 266.
(d) and (e) Intimation and refund. An intimation is sent to the assessee specifying the sum payable or the refund due, and the refund due is granted.
If you want a return checked against these adjustments before filing, our income tax return filing service can review it.
Sub-sections (2) and (3): communication before adjustment
Before any adjustment is made under sub-section (1)(a), a communication of the proposed adjustment is to be given to the assessee, in writing or in electronic mode, and the response, if any, is considered. If no response is received within thirty days of the issue of the communication, the adjustments are made and the intimation under sub-section (1)(d) is sent. Under sub-section (3), an intimation is also sent where the loss declared in the return is adjusted but no tax, interest or fee is payable and no refund is due.
Sub-sections (4) to (7): time limit, definitions and scheme
- (4): no intimation under sub-section (1) is sent after nine months from the end of the financial year in which the return is made.
- (5)(a): an "incorrect claim apparent from any information in the return" means a claim, on the basis of an entry in the return, (i) of an item inconsistent with another entry of the same or some other item; (ii) for which the information required to substantiate it has not been furnished; or (iii) in respect of a deduction that exceeds a specified statutory limit expressed as a monetary amount, a percentage, a ratio or a fraction.
- (5)(b): the acknowledgement of the return is deemed to be the intimation where no sum is payable or refundable under sub-section (1)(c) and no adjustment has been made under sub-section (1)(a).
- (6) and (7): the Board may make a scheme for centralised processing of returns, laid before each House of Parliament as soon as may be. The scheme is not in the text consulted.
Sub-sections (8) and (9): the notice
Where a return has been furnished under section 263 or in response to a notice under section 268(1), the Assessing Officer or the prescribed income-tax authority, if he considers it necessary or expedient to ensure that the assessee has not understated the income, computed an excessive loss or under-paid the tax, serves a notice requiring the assessee, on a specified date, either to attend the office of the Assessing Officer or to produce evidence in support of the return. No such notice is served after three months from the end of the financial year in which the return is furnished. See sections 268 to 272 for the inquiry provisions.
Sub-section (10): the assessment order
On the day specified in the notice, or as soon afterwards as may be, after hearing the evidence the assessee produces and other evidence the Assessing Officer requires on specified points, and after taking into account all relevant material gathered, the Assessing Officer, subject to sub-sections (11) and (13), makes by an order in writing an assessment of the total income or loss and determines the sum payable or the refund due on that basis.
Sub-sections (11) to (14): non-profit entities and approvals
| Sub-section | What it provides |
|---|---|
| (11) and (12) | For research associations, associations or institutions, and institutions referred to in Schedule III (Table: serial numbers 23, 24 and 25) that file a return under section 263(1)(a)(iv), no assessment order is made without giving effect to section 11 unless the Assessing Officer has intimated the contravention to the Central Government or prescribed authority and the approval has been withdrawn or the notification rescinded |
| (13) | For a registered non-profit organisation, where the Assessing Officer is satisfied that a specified violation under section 351(1) has been committed, he sends a reference to the Principal Commissioner or Commissioner to withdraw the approval or registration, and no assessment order is made without giving effect to the order under section 351(2)(ii)(A) or (B) |
| (14) | For a university, college or other institution referred to in section 45(3)(a): if the activities are not in accordance with the conditions of approval, the Assessing Officer may, after giving a reasonable opportunity, recommend withdrawal of approval to the Central Government, which may withdraw it by order |
Specified violations are explained in sections 351 to 353.
Sub-section (15): link to the earlier payments
Where a regular assessment is made under sub-section (10) or section 271, any tax or interest paid under sub-section (1) is deemed to have been paid towards it. If no refund is due on the regular assessment, or the amount refunded under sub-section (1) exceeds the amount refundable, the whole or the excess refunded is deemed to be tax payable by the assessee and the provisions of the Act apply accordingly.
A worked example
The dates are assumed. Anita Rao files her return for the tax year on 31 July in the financial year ending 31 March 2027.
- Nine-month limit for an intimation: nine months from 31 March 2027, that is 31 December 2027.
- Last date for a notice under sub-section (8): three months from 31 March 2027, that is 30 June 2027.
- If the return claims a deduction above a specified statutory limit, it is an incorrect claim apparent from the return; a communication is sent, and if she does not respond in thirty days the adjustment is made and the intimation follows.
Need help with a processed return?
An intimation that differs from your return, or a notice under sub-section (8), calls for a careful look at the figures and the dates. Our legal dispute resolution team and our income tax return filing team can help you respond.
Key takeaways
- Section 270(1) allows six kinds of adjustment; the Finance Act, 2026 omitted "under section 144 or" from item 6 w.e.f. 1-4-2026.
- Thirty days to respond come before any adjustment.
- The intimation limit is nine months and the notice limit three months, each from the end of the financial year.
Read next
- Sections 268 to 272: inquiry before assessment and directions of the Joint Commissioner
- Section 273: faceless assessment
- Section 287: rectification of mistake
- Section 289: notice of demand
- Chapter XVI of the Income-tax Act, 2025: procedure for assessment
- Where the earlier Act's provision sits in the 2025 Act
Disclaimer: Based on the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026, as consulted on 2 October 2026. It explains the words of the Act only; the Income-tax Rules, 2026, notifications, circulars, later amendments and the way the tax authorities and courts apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.