Income Tax Notice Under Section 245 – Meaning and Impact
A notice under Section 245 is issued by the Income Tax Department when your tax refund is proposed to be adjusted against any outstanding tax demand from previous years. The department informs you before making such an adjustment and provides an opportunity to respond.
At Nainit Savla & Associates, we assist taxpayers in reviewing outstanding demands, verifying their accuracy, and responding effectively to protect legitimate refunds and ensure compliance.
Demand Analysis
Reviewing past tax demands to check validity and accuracy.
Response Filing
Assisting in accepting or disputing demands on the tax portal.
Rectification Support
Filing corrections for incorrect or duplicate tax demands.
Refund Protection
Ensuring rightful refunds are not wrongly adjusted.
Meaning of Section 245 Notice
Section 245 allows the Income Tax Department to set off your current tax refund against any outstanding demand from earlier assessment years. However, such adjustment can only be made after notifying you and giving an opportunity to respond.
The notice includes details of the demand and the refund amount proposed to be adjusted.
Impact of Section 245 Notice
- Reduction or adjustment of your tax refund
- Possible loss of refund if demand is valid
- Opportunity to dispute incorrect tax demands
- Requirement to respond within specified time
Why You Should Not Ignore This Notice?
Ignoring a Section 245 notice may result in automatic adjustment of your refund, even if the demand is incorrect. Timely response ensures that your rights are protected and discrepancies are resolved.
- Prevent wrongful deduction of refunds
- Correct inaccurate tax demands
- Avoid future tax complications
- Maintain accurate tax records
Received a Section 245 Notice?
Get expert help to review demands and protect your tax refund effectively.
Talk to a Tax ExpertF.A.Q.
It means the Income Tax Department plans to adjust your refund against any outstanding tax demand from previous years.
It can reduce or fully adjust your tax refund if the demand is valid, affecting your expected refund amount.
Yes, if the demand is incorrect, you can dispute it by responding on the income tax portal with supporting documents.
Yes, failing to respond may lead to automatic adjustment of your refund.
The notice specifies a deadline, and you must respond within that period to avoid automatic action.
You can submit proof of payment and request rectification to prevent adjustment.
Yes, if the demand is incorrect or resolved, your refund will be released accordingly.
