Answer

1. F

   Facts

   A demand stays open if the challan was not linked to it, for example when paid under the wrong assessment year or minor head. CPC accepts a tax credit mismatch rectification with paid challan details to fix this.

2. P

   Provisions and law

   • Sec 154, Income-tax Act 1961 (now Sec 287)Mistakes apparent from the record can be rectified on request within four years from the end of the financial year of the order.
   • Sec 220, Income-tax Act 1961A demand is payable within 30 days of service of the notice of demand; simple interest of 1% a month runs after that; the officer may allow more time or instalments, and may treat you as not in default while an appeal is pending (2025 Act number to be confirmed).
3. A

   Analysis

   Suppose you paid ₹12,000 as self-assessment tax instead of tax on regular assessment, or for AY 2025-26 instead of AY 2024-25. The money is with the department but not against the demand. Use the challan details (BSR code, date, serial number) in a tax credit mismatch rectification, or ask the officer to adjust it. Also reply to the demand as disagree, reason 'demand already paid'.

4. C

   Conclusion

   1. 1Download the challan and check assessment year and minor head.
   2. 2Respond to the outstanding demand choosing that it has already been paid, with challan details.
   3. 3File a tax credit mismatch rectification with the paid challan.
   4. 4If the challan year or head is wrong, ask the officer about correction.
   5. 5Track until the demand shows nil.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.