Simplified Laws Guide to Taxation and Legal Concern Recently one of my friends was shocked to see outstanding income tax demand appearing in e-Filing portal of the income tax department, though according to him, entire tax dues are paid.
‘Oh Mind, Relax please!’ is the title of a book written by Swami Sukhabodhananda. If you are an income tax assessee and even if you have filed your return up to date, we must say that ‘Oh mind, don’t relax please! Once the return is filed, you may say “Yes, it’s done for this year’ isn’t it? Sorry, you may have to do some more homework! When you have time, just login to your account in income tax e-filing portal and see whether any outstanding income tax demand is appearing in your account!
So, my first reaction to him was ‘Don’t worry’ the department is updating the software and there may be errors from their end too.
(Read: How to file online rectification of income Tax Application u/s 154 of Income Tax act 1956)
When you look at e-portal, it may appear as under
The tax demand may arise on account of many simple reasons. Say for example, while filing the return you would have wrongly / not fed the right information or the department would not have considered the rectification filed by you u/s 154 for the previous assessment years.
Now that the Income Tax e-portal is becoming more and more user-friendly, they are enabling more features which will help the taxpayers to rectify the mistakes online.
How to check outstanding Income tax demand amount in the e-Filing portal?
Login to your account in income tax e-portal and check “My Pending Actions” in the dashboard.
Step by step procedure to handle outstanding demand –
Ascertain the nature of Income Tax Demand: First and for most thing, you have to ascertain the reason for raising demand. You will get the information from Intimation received u/s 143(1) of Income tax Act.
If you have not received intimation u/s 143(1) you can visit Income Tax E-Filing Website and request for re-sending of Intimation u/s 143(1) / u/s 154 .
Pay Undisputed Tax: If the department is right in raising the tax demand, simply pay it! (Note: If you won’t pay, then department will adjust the outstanding dues against refunds, if any)
Rectify Mistake apparent on record: If you are not satisfied about the demand amount, you have the option of filing rectification application seeking rectification of mistake in the order passed by CPC/AO.
File Revised Return if required: In case demand rising by the department is due to incorrect filling of data, go ahead and file a revised return. Fresh/additional claim of deduction under chapter VIA or loss cannot be accepted in rectification. In such cases you can file revised return.
Submit response to Outstanding Tax Demand
After following above steps ie after payment of undisputed tax demand and filing rectification/revised return where ever required, you can submit your response to outstanding tax demand.
The detailed process to submit the response to Outstanding Tax Demand is as below:
- Login to www.incometaxindiaefiling.gov.in and check Refund/Demand status menu.
- If there is any outstanding tax demand, the “Response to Outstanding Tax Demand” will appear showing demand amount along with A.Y. for which demand exists.
- You can submit your response by selecting correct option. Option available is – 1. Demand is correct 2. Demand is partially correct and 3. Disagree with demand.
- If you select demand is correct then you cannot disagree with the demand letter.
- If you select other options i.e. demand is partially correct or disagree with demand, you will have to provide reasons for exercising the option along with documentary evidence.
- Based on the reason selected, the assessee needs to provide additional information as below
- Demand Paid: BSR Code, date of payment, serial no, Amount. If challan doesn’t have serial no you will have to upload challan.
- Demand already reduced by rectification/Revision/Appeal: Upload rectification order passed by AO and provide information on date of order, pending demand amount after rectification, etc.
- Rectification / Revised Return filed at CPC: If you have filed rectification for the demand amount, provide acknowledgement No of rectification application filed online. In case if you have filed revised return, you need to provide e-Filed acknowledgement No of the revised return.
- Rectification filed with AO: If you have filed rectification application manually to the jurisdictional assessing officer, provide date of filing application.
- Once assessee submits the response, transaction id will get generated which can be viewed later.
- Other Points:
- If demand is shown to be uploaded by AO in the above table, rectification right is with Assessing Officer, you have to contact your jurisdictional Assessing Officer for rectification.
- For the demand against which there is “No Submit response option” available such demand is already confirmed by the Assessing Officer. You have to contact your Jurisdictional Assessing officer for rectification if needed.
- If you have any concern on return processing by CPC, you can submit your grievances online. For details you can check our other article Tax Payer can submit online grievance relating to CPC and efiling of Income tax Return
Is it necessary to respond to the outstanding demand appearing in e-Filing Portal?
Yes, if you fail to submit response to any of the demand appearing in e-Filing portal, subsequent refund if any due to you will be adjusted against outstanding demand amount. Further department may initiate proceedings to recover the demand amount.
You can download, Income tax department manual on Response to Outstanding Tax Demand, to know detailed process of submitting the response to outstanding tax demand. We have compiled frequently asked question (FAQ) on CPC Communication on processing of Income Tax Return and filing of Rectification application.
Did you face problem of outstanding demand? Comment your experience in the comment section at the end of the article.
Should you need any assistance in addressing issue on Demand appearing in income tax portal with Bangalore income tax jurisdiction, please do contact us at prakasha@balakrishnaandco.com
