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Once you submit the Income Tax Returns, the next and the final step of the e-filing process is verification. The Income Tax Department (IT Department) checks the income declarations and tax paid to see if all these details match. Only then the IT Department will accept the tax return filed as per Section 143(1).
If the taxes paid are found to be less than what you owe, they will issue you a demand notice. Let us understand how to respond to such a demand notice from IT Department.
Your jurisdictional Income Tax Officer (ITO) will upload the Demand Notice online. You can access the content of this notice by logging into your e-filing account on the website www.incometaxindiaefiling.gov.in, where you can record your responses.
Step 1 : Login to your e-filing account on www.incometaxindiaefiling.gov.in with user ID and password.
Step 2: Click on ‘E-file’ and go to ‘Respond to Outstanding Tax Demand’.
You will see the following details displayed-
Step 3: Click on ‘Submit’ for the relevant assessment year. Choose one of the options mentioned below-
Option 1 – Demand is correct
Step 1: When you select this option, a pop-up screen appears with a message ‘If you confirm, demand is correct then you can’t disagree with the demand’.
Step 2: Click on the ‘Submit’ button.
Step 3: A success message will be displayed.
Step 4: If a refund is due, the outstanding amount and the interest will be adjusted against the refund due. Otherwise, you must pay the demand immediately.
Read about how to pay your tax demand
Option 2 – Demand is partially correct
Step 1: You will see two fields to enter a correct and incorrect amount.
Step 2: Once you enter the amount in the fields, you must choose a reason for stating the department’s calculation to be partially correct.
Option 3 – Disagree with the Demand
Step 1: Upon choosing this option, you must provide details of why you disagree with the department’s call.
Step 2: You must also provide reasons for your disagreement from the available options.
Step 3: Submit your response to view a success screen with a transaction ID.
Step 4: You can revisit the response when you click on ‘View’ under the ‘Response’ tab.
Step 5: You can view the serial number, transaction ID, date of response, and response type will be displayed.