ITR
Checking outstanding demand before filing your return
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Facts
Outstanding demands for your PAN are listed under Pending Actions > Response to Outstanding Demand. Checking before filing lets you clear or dispute them before your new refund is caught.
Provisions and law
- Sec 245, Income-tax Act 1961 (now Sec 438, Income-tax Act 2025)Refund can be set off against an earlier demand only after a written intimation to the taxpayer
- Sec 156, Income-tax Act 1961 (now Sec 289, Income-tax Act 2025)A notice of demand states the tax, interest or penalty payable
Analysis
Clearing doubtful demands early means your next refund is not held up. Example: a salaried person expecting a ₹28,000 refund finds an AY 2017-18 demand of ₹4,200 from a processing error. Filing a rectification now can clear it before the new refund is processed. If the demand is genuine, paying it directly avoids interest under Sec 220(2) building up.
Conclusion
- Log in and open Response to Outstanding Demand
- List each demand by year, section and amount
- Pay genuine ones through e-Pay Tax
- Dispute or rectify wrong ones before filing
- Recheck after a few weeks
A Savvy can do this for you
Refund set-off, Sec 245 (now 438)
₹2,499
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