What is an Income Tax Notice under Section 245?
A notice under Section 245 of the Income Tax Act is sent when the Income Tax Department plans to adjust your current tax refund against any old pending tax dues.
In simple terms, if you have any previous unpaid tax, the department may reduce that amount from your current refund.
Before doing this, the Centralized Processing Centre (CPC) informs you through a notice and asks for your confirmation.
What Does This Notice Mean?
- You are given a chance to agree or disagree with the adjustment
- You can check whether the old tax demand is correct or not
- You usually get 30 days to respond
Why is Timely Response Important?
Responding on time helps you:
- Protect your refund from being wrongly adjusted
- Keep your tax records accurate and updated
- Avoid confusion or disputes in future tax filings or assessments
In short, replying to a Section 245 notice helps you confirm whether the old tax demand is correct or not and ensures smooth processing of your refund.
Who Should Reply to a Section 245 Notice?
You should respond if:
- Your refund is being adjusted against old tax dues
- You are a business receiving a refund adjustment notice
- You disagree with the past demand or have already paid it
- You have received a notice about refund adjustment under Section 245
FAQs – Intimation under Section 245 of the Income Tax Act
1. What is Section 245 of the Income Tax Act?
Section 245 allows the Income Tax Department to adjust your current tax refund against any pending tax dues from previous years.
2. Is it mandatory to respond to a Section 245 notice?
Yes, it is important to respond within the given time (usually 30 days) to avoid automatic adjustment of your refund.
3. What happens if I ignore a Section 245 notice?
If you do not respond, the department may automatically adjust your refund against the outstanding demand.
4. Can I disagree with the tax demand mentioned in the notice?
Yes, you can disagree if the demand is incorrect and provide supporting documents as proof.
5. How can I respond to a Section 245 notice?
You can respond online through the Income Tax portal by selecting the notice and submitting your response.
6. What should I do if I have already paid the tax demand?
You should disagree with the notice and upload proof of payment, such as challans or receipts.
7. How much time do I get to respond to the notice?
You usually get 30 days from the date of receiving the notice.
8. Can the department adjust my refund without my permission?
Yes, if you do not respond within the given time, the department can proceed with the adjustment.
9. What is CPC in income tax?
CPC (Centralized Processing Centre) is the unit that processes income tax returns and sends notices like Section 245.
10. Will responding to this notice delay my refund?
It may take some time for processing, but responding correctly helps ensure you receive the correct refund amount.
