Let us see how to respond to a demand notice from Income Tax Department. Income tax demand raised by you is uploaded by the AO on the income tax website. The details of the demand can be accessed by the taxpayer by logging on to www.incometaxindiaefiling.gov.in. The taxpayers can also respond online to these demands.

Step-by-Step Guide to Respond to a Demand Notice Received by the Income Tax Department

If you have received an income tax demand – here are the steps to take to respond to a demand notice  received from the Income Tax Department–

Step 1 Login to www.incometaxindiaefiling.gov.in with user ID, password, and date of birth.

Step 2 Click on ‘E-file’ and go to ‘Respond to Outstanding Tax Demand’.

• The following details will be displayed –
  • Assessment year
  • Section code
  • Demand notification number
  • Date on which demand is raised
  • Outstanding demand amount
  • Uploaded by
  • Rectification rights
  • Response – submit and view

Step 3 Click on ‘Submit’ for the relevant assessment year. Choose one of the one options mentioned below-

• Demand is correct
• Demand is partially correct
• Disagree with demand

• Option 1 When you select – ‘Demand is correct,’ a pop-up screen appears with a message, ‘If you confirm, demand is correct then you can’t disagree with the demand.’ Click on submit if this is ok with you. A success message shall appear on your screen.
  • If any refund is due, the outstanding amount along with interest will be adjusted against the refund due.
  • In any other case, you must repay the demand immediately. Read about how to pay your tax demand.

• Option 2 When you select – ‘Demand is partially correct’ – you need to enter ‘amount which is correct’ and ‘amount which is incorrect’. If you enter amount which is incorrect, you have to mandatorily fill one or more reasons for it –
  • Demand has already been paid – Provide the CIN (challan identification number). Also mention BSR code, date of payment, the serial number of challan and amount. You can also add your comments under ‘remarks.’ If CIN is not available, mention that demand has been paid by challan and CIN is not available. Also mention the date of payment, amount, and remarks (your comments), if any.
  • Demand has already been reduced by rectification/revision – Provide the date of order, demand amount, details of AO who has rectified. Next, upload rectification/appeal effect order passed by AO.
  • Demand has already been reduced by appellate order but appeal effect has to be given by the department – Provide the date of order and the appellate order passed by (details of CIT(A), and the reference number of order.
  • Appeal has been filed and stay petition has been filed, or stay has been granted by, or installment has been granted by – Provide the date of filing of the appeal, appeal pending with (details of CIT(A), stay petition filed with (details of office). If the stay has been granted, you have to also upload the copy of the stay order.
  • Rectification/revised return has been filed at CPC – The following details are required additionally:
    • Filing type
    • E-filed acknowledgment number
    • Remarks (comments, if any of the tax payer)
    • Upload challan copy
    • Upload TDS certificate
    • Upload letter requesting rectification copy
    • Upload indemnity bond
  • Rectification has been filed with assessing officer – Mention the date of application and remarks (comments, if any of the taxpayer).

• Option 3 – If you ‘Disagree with the Demand’ then you must furnish the details of your disagreement along with reasons. The details/reasons are the same as the mentioned above under ‘demand is partially correct.’ After submitting a response, the success screen would be displayed with the transaction ID.

You can also view the response submitted by you by clicking ‘View’ under the response column and the following details will be displayed: serial number, transaction ID, date of response and response type.

We hope that you’ll be able to respond to a demand notice from Income Tax Department after reading our article.