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Timely Response : Know the Steps to Respond to intimation under Section 245 of the Income Tax Act


Timely Response : Know the Steps to Respond to intimation under Section 245 of the Income Tax Act

Understanding Section 245 of the Income Tax Act

Intimation under Section 245 is a formal notice issued by the Income Tax Department to inform taxpayers that they are adjusting a previous year's pending tax payable with the current year's refund. Section 245 of the Income Tax Act grants the department the authority to make such adjustments. However, it is a mandatory requirement for the department to send an intimation under Section 245 to the taxpayers before proceeding with the adjustment. This notification allows taxpayers to respond and express their agreement or disagreement with the proposed adjustment.

 

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Most Asked Questions

 

Let's consider a scenario involving Mr. Ramesh Kumar to illustrate the impact of Section 245 of the Income Tax Act. In the financial year 2015-16, Mr. Kumar faced a tax demand of Rs 30,000, which he contested through a rectification request under Section 154, believing the matter was resolved. Fast forward to the financial year 2019-20, Mr. Kumar filed his return with an anticipated refund of Rs 20,000.


To his astonishment, he received an intimation under Section 245, revealing that his expected refund was being adjusted against the outstanding demand from the financial year 2015-16. This unexpected development stirred memories of his previous challenge with the demand, prompting Mr. Kumar to revisit the issue. The situation highlights how the Income Tax Department exercises its authority under Section 245, emphasising the need for taxpayers to respond to such intimations to seek resolution promptly.


Time Limit to respond intimation u/s section 245

The time limit to respond to an Intimation under Section 245 of the Income Tax Act is typically 30 days from the date of receiving the intimation. It is essential to submit your response within this stipulated timeframe to ensure that your concerns or agreements are considered by the Income Tax Department.

Failure to respond within the specified period may result in the automatic adjustment of the outstanding demand mentioned in the intimation against any eligible refund.


Steps to Respond to Intimation under Section 245

1. If You Agree with the Outstanding Demand:

Step 1: Login: Visit https://www.incometax.gov.in/iec/foportal/ and log in using your user ID and password.

Step 2: Navigate to Pending Actions: Go to the "Pending Actions" tab.

Step 3: Access Response to Outstanding Demand: Select "Response to Outstanding Demand."

Step 4: Submit Response: Choose "Submit Response.

Step 5: Confirm Demand is Correct: Select "Demand is correct."

Step 6: Submit: Click on "Submit."

Step 7: Verification: Verify that your submission has been successfully recorded.


2. If You Do Not Agree or Partially Disagree with the Outstanding Demand:

Step 1: Login: Visit https://www.incometax.gov.in/iec/foportal/ and log in using your user ID and password.

Step 2: Navigate to Pending Actions: Go to the "Pending Actions" tab.

Step 3: Access Response to Outstanding Demand: Select "Response to Outstanding Demand."

Step 4: Submit Response: Choose "Submit Response.

Step 5: Disagree with Demand: Select "Disagree with demand (Either in full or part)."

Step 6: Submit: Click on "Submit."

Step 7: Provide Reasons: Submit the reasons for your disagreement, such as "Demand Paid," "Demand already reduced by rectification/revision," "Appeal has been filed," etc.

Step 8: Submit Reasons: Provide additional details as required.

Step 9: Verify that your submission, along with your reasons, has been successfully recorded.

Step 10: Follow Up: Keep track of your response and follow up with the Income Tax Department if necessary.


Reason for issuing Intimation u/s 245