If your income tax refund has not come yet, then check once whether the Income Tax Department has sent you such a notice?
Even after filing the income tax return, income tax refund has not been received by such taxpayers to whom the Income Tax Department has sent tax notice under Section 245 of the Income Tax Act, 1961.
This tax notice is sent to the individuals who have not paid the previous tax to inform them that the income tax refund amount (full or partial) will not be sent to them and the department will adjust the same against the pending liability of the previous years. Will do it.
Last week, the Income Tax Department had informed from its official account that there are some cases in which refunds are due to the taxpayers, although they have not paid the previous tax. Section 245(1) of the Income Tax Act, 1961 mandates that the taxpayer be given an opportunity of representation before the existing tax dues are adjusted from his income tax refund. The department has said that accordingly, such taxpayers who have old dues are being informed.
Let us tell you that if a notice is sent to a person under Section 245, then this information is given to him through SMS and registered email ID. Such persons can also read their tax notices on their income tax e-filing account.
The Income Tax Department sends such notice when the previous tax dues are adjusted with the current refund. If the current refund is more than the previous tax dues, the remaining refund is sent to the taxpayer’s bank account after adjusting the old dues. Whereas if the opposite happens, i.e. the outstanding amount is more than the refund amount, then the department imposes additional tax liability on the taxpayer. To avoid any penalty in future, the taxpayer should deposit the remaining amount by the date given to him by the department.
Two income tax notices
A person claims income tax refund only at the time of filing ITR. After processing the income tax return, the income tax department is required to send an intimation notice under section 143 (1). In that notice you are told whether your income tax refund claim has been accepted or not.
President of Karnataka CA Association and CA Sujata ji said, “Two notices are sent to a person by the Income Tax Department. The first notice is sent under section 143(1), which contains details of the tax refund amount. The second notice is issued under section 245 stating that the tax refund specified in the notice sent under section 143(1) is being adjusted against previous tax liability. There is tax liability, it is also mentioned.
Sujatha told that if the liability remains even after adjusting the tax refund of the current year, then another notice is sent under section 156. This third notice (if additional tax liability exists) is a tax demand notice.”
How to read Section 245 Income Tax Notice?
The tax notice of an individual is available on the Income Tax e-filing portal. To read, he has to download it from the ITR e-filing portal. Tax notice is available in ‘e-Proceeding’ option under ‘Pending Action’ tab. After downloading the notice, you should check your name, PAN and other details to ensure that the notice is sent only to you and not to anyone else.
Tax experts say that when a person receives a notice under Section 245, the first thing he should check is whether the correct PAN and assessment year is given in it or not.
In the notice, the person is informed as to which year the outstanding demand has been raised. Apart from this, an annexure is also sent along with the notice. The annexure contains information about the tax calculations done by the Income Tax Department, due to which the demand for additional tax has arisen.
What is the time limit to respond to Section 245 Income Tax Notice?
The time limit for replying to the income tax notice under section 245 is given in the notice itself. Generally it is 21 days. “However, if the taxpayer fails to respond to the notice under section 245 within 21 days, the Income Tax Department will automatically adjust the tax refund against the liability,” says Dr Surana, founder, business consulting group RSM India. Takes.”
How to respond to Section 245 Income Tax Notice online?
If a person has received an income tax notice under section 245, he broadly has two options to respond-
- “Agree with the outstanding demand.
- “Disagree with the demand (in whole or in part).
Sujata said, “If the taxpayer agrees with the demand, he can pay the demand amount. Once he replies, “The demand is correct”, he cannot disagree with the demand later. Therefore, the taxpayer One should be careful in choosing the option.”
If the taxpayer selects the option to disagree with the demand (completely or partially), a list of reasons for disagreeing appears. “The tax payer has to choose one from a list of 11 options to disagree with the demand,” says Sujata.
Surana said, “If the assessee does not agree to the adjustment in whole or in part, the Central Processing Center immediately refers the case to the Assessment Officer (AO). The AO gives his feedback within 21 days from the date of such reference. Whether adjustment should be made as per CPC or not and if partial adjustment is to be made, details of the demand amount to be adjusted for each year are required to be given.”
Surana said, “If no response is received from the AO within 21 days, the CPC will either issue the refund without adjustment, or adjust the refund to the extent of the agreed demands for adjustment on behalf of the individual. Thus, the CPC will not withhold these refunds beyond the prescribed period of 21 days from the date of reference to the AO and the amount will be released to the assessee without any delay. For the effect of no response/delay to the AO. Will be held fully responsible.”
If the AO disagrees with the individual’s responses to the Section 245 Income Tax Notice, feedback will be given to the CPC by the AO. This feedback will indicate whether adjustment (current year’s tax refund combined with previous year’s tax liability) should be made or whether a partial adjustment should be made. Besides, the demand amount of tax liability (if any) for each year will also be given.
