How To Respond To an Income Tax Demand Notice

Income tax demand notice is received in a situation when your tax payable is less than the tax to be paid as per income tax department. Once you have verified your income tax return after submitting it, the income tax department cross checks the income declared and tax paid by you with the information available with them. If your tax calculations match with those made by the assessing officer, then you will receive an income tax notice from the department accepting your tax return under section 143(1).

If the department has sent you such a notice of outstanding tax demand, you can respond to the income tax notice by logging in to your account on the e-filing website -https://incometaxindiaefiling.gov.in/. Given below are the steps on how to respond to an income tax demand notice using the e-filing website.

  • Login to your account on the e-filing website by entering your credentials: User ID (PAN), password, date of birth and captcha code.
  • Click on the ‘e-file’ tab and select ‘Response to outstanding Tax Demand’ option.
  • You will be re-directed to a new page. Enter your PAN, captcha code and click on ‘Submit’.
  • An outstandingincome tax notice will appear on your screen with details such as assessment year (AY), section code (under which the notice has been served), demand identification number etc.
  • Click on ‘Submit’ in the response column for the appropriate AY to submit your response. The assessee has to select one of these options:
    a) Demand is correct
    b) Demand is partially correct
    c) Disagree with demand
    d) Demand is not correct but agree for adjustment

 

(1) If you select option A

A pop up will come up on your screen with a message ‘If you confirm demand is correct then you cannot disagree with the demand’. Click on submit if you agree with the department’s calculations and you will get a success message. If there is any tax amount due, you have to pay it immediately. If any refund is due, the outstanding amount along with interest will be adjusted against the refund due.

(2) If you select option B

Two amount fields will appear on your computer screen. The amount in the incorrect column will be filled automatically as the difference between outstanding demand and correct amount. You have to enter the amount which you believe is correct. You are also required to select the reason given on the website to justify why the demand is partially correct. Based on the reason/s selected, you will be required to provide additional information depending on the option you have selected.

(3) If you select option C

Just like option (B), you will be required to select from the same reasons as mentioned above.

(4) If you select option D

 You will have to mention the reasons for your disagreement. The reasons are same as those mentioned above. Enter the necessary details and click on ‘submit’. Once the information is successfully sent to the department then a transaction ID will be generated. You can check your response by clicking ‘View’ in the response column. You can click on the ‘transaction ID’ to check the response sent by you to the department.

Points to remember 

Once you have submitted your response, you should check your account everyday as the demand position gets updated daily. Alternatively, you can call the Centralized Processing Centre (CPC) in Bengaluru at 1800-425-2229 for further details.

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