Outstanding demand can be raised by the income tax department for various reasons such as incorrect selection of ITR form, incorrect IT filing due not including TDS, Self-Assessment tax challans, not filing certain forms or other processing errors by CPC.
Learn more about who generates, how to check, and how to submit, as well as the timing and payments involved.
This document covers
- What is an outstanding demand notice?
- Who can raise outstanding demand?
- How to check Outstanding demand through the Income Tax Portal?
- How to Submit Response to an Outstanding demand?
- What happens if no response is submitted
- Deadline for responding to an Outstanding demand
- Type of Payment
1. What is an outstanding demand notice?
The income tax department may issue an outstanding demand for a variety of reasons, including improper selection of ITR form, incorrect IT filing due to not including TDS, Self-Assessment tax challans, failure to file specific forms, or other processing issues by CPC.
2. Who can raise outstanding demand?
Outstanding demand can be raised by following persons.
- Centralized Processing Center (CPC) : CPC may issue the notice of demand once the income tax return filed by the taxpayer is processed. Intimation given by CPC should be treated as notice of demand u/s 156.
- Assessing Officer : In some cases, assessing officer may issue the demand notice. Such cases might be scrutiny notices, rectifications pending with AO etc.
IMPORTANT: In such a case, ensure that the DIN (Document Identification Number) associated with the notice is accessible online through your ITD account. Do not encourage recipients to respond to emails from officers that do not originate from the domain of the income tax department. Additionally, do not reply to calls from arbitrary mobile numbers.
If you are an existing or new client seeking expert advice
on IT Filing, notice processing, or related problems, visit EZTax Customer Support Page
3. How to check Outstanding demand through the Income Tax Portal?
The taxpayers can check the outstanding demand through the following process
- Login to https://eportal.incometax.gov.in/
- Go to Pending Actions and click on Response to Outstanding demand
- The next screen will show the current status of demands available on the PAN . The taxpayer needs to take corrective actions on the demand
4. How to Submit Response to an Outstanding demand?
The manner in which a response to an outstanding demand is issued can vary based on the specifics of the case.
- Demand is Correct:
If the taxpayer feels that the demand is correct, he needs to submit the response that demand is correct
- If the Demand is correct and you have not paid already, click on e pay taxes and make the challan payment
- If Demand is correct and you have paid already, add the challan details and submit the response
- Disagree with the Demand:
If the demand is incorrect, click on "disagree with demand" and select the following reasons which are applicable
- Demand paid and challan has CIN (without open challan details)
- Demand paid and challan has CIN (with open challan details)
- Demand paid and challan has no CIN.
- Demand already reduced by Rectification/Revision/Appellate Order
- Demand already reduced by appellate order but appeal effect to be given.
- Appeal has been filed, Stay petition filed.
- Appeal has been filed; Stay granted.
- Appeal has been filed; Instalment granted.
- Rectification/Revised Return filed at CPC
- Rectification filed with AO
If you have selected the response as “Demand is Correct”, you cannot change the response to "Disagree with Demand" later
5. What happens if no response is submitted.
If the taxpayer has not submitted any response to an outstanding demand, the following may happen
- Interest on outstanding demand will get accumulated over the time
- Outstanding demand will be adjusted against any future refunds
In India, tax regulations are becoming increasingly stringent since it is vital to instill basic discipline in order to pay basic tax. We (Indians) have one of the lowest rates of tax compliance worldwide. We at EZTax urge that you settle as soon as you become aware of any demand or discrepancy; otherwise, the cost will be substantially higher.
In addition, certain accountants in India cooperate closely with the evaluation officers. It is imperative that you do not use back channels to resolve your issues, as they may backfire due to the fact that your IT systems are all online and difficult to update, and the AOs are always shifting because you are not aligned with a single jurisdiction. All Online.
6. Deadline for responding to Outstanding demands
Typically, taxpayers are given 30 days to reply to a demand from the date of notification or notification. The deadline is unique to the circumstance in which the request was made.
7. Type of Payment
When the taxpayers are making the payment in response to outstanding demand, they need to select 400-Tax on Regular Assessment while paying
Refer How to pay Income Tax due Online in India?