Waiting for income tax refund? You might not get it if tax department has sent you this notice
ITR) if the income tax department has sent a tax notice under Section 245 of the Income Tax Act, 1961. This tax notice is sent to inform the individuals that the income tax department will not credit the tax refund amount (either fully or partially) and that it will set it off against the pending income tax liability from past years.
An example of this is of an individual with an outstanding tax demand in AY 2002-03 and income tax refund in AY 2023-24 is being set off now.
The income tax department via its official account on X (formerly known as Twitter) said, «There are a few cases in which refunds are due to the taxpayer, but previous demands are outstanding. Section 245(1) of the Income-tax Act, 1961, mandates providing an opportunity to the taxpayer to make a representation before adjusting the refund against an existing demand.
Accordingly, taxpayers with existing demand(s) in the previous years are being intimated of the same.»
If an individual has received an income tax notice under Section 245, then intimation will be sent to their registered email ID and SMS. One must log in to their income tax e-filing account to read the tax notice.
The income tax department can send a section 245 notice if the current year's income tax refund is being set off against the past year's outstanding tax liability.
If the current year's tax refund amount is more than the past year's tax liability, then the balance refund (tax refund less of tax liability) amount will be credited to the bank account of the individual. If the past income tax liability is more than the tax refund amount in the current year, then the additional tax liability will be imposed by the tax department.
This must be paid by an individual before the due
