RESPONSES TO INCOME TAX DEMAND

By | June 17, 2015

Now days it’s very easy to file return of income online. Lot of people prefers to file the return of income online as this is very simple, cost efficient and less time consuming. After filing of return tax payer required to send the acknowledgement called ITV to CPC Bangalore for further processing. At this point tax payer feel the job is over, but my friends just keep in mind the process does not end there. It is now the income tax department who will validate the information and then process your income tax return. Once the return is processed the income tax department will send the intimation u/s 143(1) to your email ID. If there is any arrears of demand then that needs to respond well in time. This article will elaborate the procedure that’s needs to be followed in response to arrears of tax demand.

On receiving of any email or notice from income tax department for arrears of tax demand the taxpayer should respond without fail. If you fail to respond and in case you have any income tax refund in future years that will be first adjusted against the arrears tax due.

All the details related to arrears of income tax demand will be available on income tax portal. Further the income tax department has enabled the feature to respond to such demands online. Here are the procedures to be followed by tax payer in responses to arrears of tax demand.

Actions required to be taken by Tax Payer

Please login to your account at https://incometaxindiaefiling.gov.in/e-Filing/UserLogin/LoginHome.html on the dashboard page you will find the “My Pending Actions”.

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Once you click and proceed you will have the landing page where you will find the list of all outstanding demands.

Demand List

Now on this page you will see the details like AY, demand identification details, outstanding demand amount etc. Now once you click on the submit button you will have three radio button options. And those will be

  1. Demand is Correct
  2. Demand is partially correct
  3. Disagree with demand

Demand is correct

Now if tax payer selects the option “Demand is correct’ then tax payer agrees with the demand and you cannot disagree with it later. After a successful submission of option the outstanding along with interest will be adjusted against the pending refunds if any. In case there is no refund then tax payer has to pay the outstanding demand immediately.

Demand is partially correct

Now in this option tax payer can confirm the outstanding tax demand partially. Now in the next screen tax payer has to enter the amount for correct demand and demand which is incorrect. Now for incorrect demand amount tax payer required to selects the one or more reasons from below list;

A. Demand has been already paid

1. Paid by challan having CIN

If the demand is already paid then tax payer has to provide additional information related to payment of taxes. The information is like BSR Code, Date of payment, amount paid & CIN of the challan.

2. Paid by challan does not have CIN

If the demand is already paid and the challan does not have CIN or CIN is not available then tax payer has to provide additional information related to payment of taxes and needs to upload the copy of the challan.

B. Demand has been already rectified/revised by the AO*

In case the demand is already rectified by the AO then the details of such rectification order has to mention. Those details are like date of order, AO details and also required to upload the copy of such rectification order.

C. Demand has been reduced by the Appellate Authority

In case the demand is already rectified/reduced by the Appellate Authority then the details of such rectification order has to mention. Those details are like date of order, Appellate Authority details and also required to upload the copy of such rectification order.

D. Appeal had been filed against the demand

If you disagree with demand and the appeal has been filed then all the details related to such application has to be mention.

E. Rectification/Revised return has been filed with CPC

In case the rectification/revised return has been filed with CPC then all the details of such rectification/revised return has to be provided.

F. Rectification has been filed with AO

In case the rectification has been filed with AO then the details of such rectification has to be provided and also the copy of such rectification application has to upload.

G. Others

Any other comments as the tax payer finds necessary.

Disagree with Demand

If the tax payer disagrees with the demand then tax payer has to furnish the details of such disagreements and required to provide the reason for such disagreements. The reasons for such disagreements are same like ‘Demand Partially Correct’.

Once the responses submit successfully then the transaction ID will appear on the screen. Tax payer can also click the “View” link for see the responses.

In case tax payer is not registered on the Income tax portal. He or She can do so by filling the necessary details. In case tax payer faces any issues for accessing the information from the portal then he can make the application to AO asking for details of outstanding tax demands.

4 thoughts on “RESPONSES TO INCOME TAX DEMAND

  1. Snehal Parikh

    IT dept. had sent me a demand note in June 2008 as Form 16 & Home loan Interest certificate was required to be produced at IT Dept. I visited IT Dept and met with AO with all these docs and resolved this. In July 2008 RO was processed and I received IT Refund in Aug. 2008 (it is also available on IT Dept. website for IT Refund).

    I observed a demand note this year on my web page for e-filing IT return and I disagreed with it, giving explanation and details. I also submitted my reply along with supporting doc of IT Refund credit into my account.

    Where do see AO’s response and closure of this ? I want check and ensure that AO has closed this.

    Pls. advise asap.

    Regards,
    Snehal Parikh

    Reply
  2. Satya Pal

    I bear PAN No. AXXXX9999X. Vide communication reference no. CPC/1516/GXXXXXXX7710, DIN XXXXXXXXX57378086T, Income Tax Department raised demand amounting to Rs. 2330/- for the assessment year 2010-11 towards me. I made payment of Rs.2500/- against this demand in State Bank of India having BSR Code 999999 vide Challan No. 21212, dated 05/10/2015 I made the payment. Still a demand of Rs. 957 is shown towards the above said demand. The same may please be got erected and refund of Rs. 500/- (which has been shown adjusted against the demand) for the current year may please be refunded as I have made full payment of the demand

    Reply
    1. T@xguru Post author

      The demand which was originally determined was upto certain date. The time gap from the date of demand till the date of actual payment is an open period for the purpose of calculating further interest liability.

      In your case the demand which was for the year 10-11 which was Rs. 2330 was upto to some date (assuming 05/10/13) and the amount that you paid on 05/10/15. So the period from 6/10/13 to 5/10/15 is an open period for the purpose of interest. So the additional interest is calculated for that period.

      Note: Never quote your actual PAN in any of the sites.

      Reply
  3. Manimegalai S

    I have received a demand notice for IT relief 89. I haven’t filed 10e for claiming 89 relief. So now I filed form 10e and successfully uploaded 10e.

    My question is whether my part of replying demand is completed or anything else I have to do to clarify IT Dept.

    Reply

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