Income Tax Demand Notice/Intimation AY 2023-24: ITR filers can receive a tax demand notice if there is a discrepancy between the tax they have paid and their tax liability. Know how to reply
Income Tax Demand Notice/Intimation AY 2023-24: Income Tax Return (ITR) filers can receive a tax demand notice from the Income Tax Department if there is a discrepancy between the tax they have paid and their tax liability calculated by the department. This article explains how to reply to tax demand intimation from the income tax department.
The first thing you should do is to check whether the notice is meant for you or not. After that, you should carefully review the intimation.
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“The taxpayer firstly needs to ensure their personal details mentioned in the intimation such as PAN, name, address and assessment year to which the intimation pertains. Thereafter, the taxpayer should review such intimation and the documents pertaining to the tax return furnished by him/her for any discrepancies and analyse the reason for such discrepancies,” says Dr Suresh Surana, Founder, RSM India, a tax consultancy firm.
After reviewing the intimation and tax documents, the taxpayer is required to submit a response on the Income Tax portal as to whether the demand raised is correct/incorrect or partially correct.
“In case the taxpayer agrees with the changes mentioned in intimation, he/she can rectify the same by filing a revised return and paying such additional tax, if any, raised by the revenue authorities. However, in case the taxpayer does not agree with the adjustments made by the CPC, he/she can file a rectification application u/s 154(1) of the IT Act,” says Dr Surana.
Steps to follow
Abhishek Soni, CEO and Co-founder of Tax2win by Fisdom, suggests the following steps ITR filers should follow to reply to a tax demand notice.
- Review Intimation: Understand the tax demand details and reasons.
- Check ITR and Form 26AS: Verify your ITR details and Form 26AS AIS/TIS for accuracy.
- Evaluate Calculation: Examine how the tax demand was calculated.
- Gather Evidence: Collect supporting documents for discrepancies.
- Respond Timely: Stick to the response deadline mentioned.
- File Rectification Request: If necessary, file a rectification request online with supporting documents.
- Follow Up: Monitor progress and follow up if needed.
- Consider Professional Help: Seek tax expert assistance if the matter is complex or significant.
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How to reply to a tax demand notice on e-filing portal
According to Soni, the following steps will help you respond to a tax demand notice efficiently on the Income Tax Department’s e-filing portal.
Step 1: Login to the e-filing portal and click on e-file and select ‘Respond to Outstanding Tax Demand’.
Step 2: Click ‘E-file’ and select Details displayed:
- Assessment year
- Section code
- Demand notification number
- Date of demand
- Outstanding demand amount
- Uploaded by
- Rectification rights
- Response – submit and view
Step 3: Click ‘Submit’ for the relevant assessment year and choose an option:
Option 1 – Demand is correct:
- Confirming the demand’s correctness.
- Click ‘Submit’.
- Success message displayed.
- If a refund is due, the Refund adjusts against the demand or pays immediately if due.
Option 2 – Demand is partially correct:
- Enter correct and incorrect amounts.
- Choose a reason for partial correctness.
- Provide necessary details or upload relevant documents.
Option 3 – Disagree with the Demand:
- Provide reasons for disagreement and select from available options.
- Submit response.
- View response details under the ‘Response’ tab.
It is important for taxpayers to respond to any intimation sent by the Income Tax Department within the prescribed time limit mentioned in the notice.
More than 6.8 crore ITRs have been filed by taxpayers for AY 2023-24. The tax department processed over 4.6 crore verified returns till August 13, 2023.
