Income Tax Notice Under Section 245 – Adjustment of Refund Against Tax Demand
A notice under Section 245 is issued by the Income Tax Department when your pending tax refund is proposed to be adjusted against an outstanding tax demand from previous years. Before making such an adjustment, the department provides you an opportunity to respond and either accept or dispute the demand.
At Nainit Savla & Associates, we assist taxpayers in reviewing past demands, verifying their validity, and submitting appropriate responses to Section 245 notices. Our goal is to protect your refunds and ensure that incorrect or unjustified demands are properly addressed.
Demand Verification
Checking the authenticity and accuracy of outstanding tax demands.
Response Filing
Submission of acceptance or objection through the income tax portal.
Rectification Support
Filing rectification requests for incorrect or duplicate demands.
Refund Protection
Ensuring legitimate refunds are not wrongly adjusted against invalid dues.
What is Section 245 Notice?
Section 245 allows the Income Tax Department to adjust a taxpayer’s refund against any outstanding tax demand. However, the department must first notify the taxpayer and provide an opportunity to respond before making the adjustment.
The notice includes details of the demand and the amount proposed to be adjusted, along with instructions to accept or disagree with the adjustment.
Received a Section 245 Notice?
Get expert help to verify tax demands and protect your refund from incorrect adjustments.
Talk to a Tax ExpertF.A.Q.
A Section 245 notice is issued when the Income Tax Department intends to adjust your pending tax refund against any outstanding tax demand from previous years.
Yes, it is highly advisable to respond. If you do not reply within the given time, the department may proceed with adjusting your refund automatically.
You can log in to the income tax portal and either accept the demand or submit a disagreement with proper reasons and supporting documents.
If you accept the demand, the department will adjust the refund amount against the outstanding tax liability.
You should disagree with the demand on the portal and provide supporting documents. You may also need to file a rectification request or appeal.
The department must notify you before making any adjustment. However, if you fail to respond, they may proceed with the adjustment.
Common reasons include mismatch in TDS, incorrect income reporting, past assessment orders, or errors in tax filings.
