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Tax refund delay due to previous demands: Income Tax department

Updated: Oct 5, 2023

After social media outrage over Income Tax Department denying ‘legitimate’ refund claims by adjusting them with outstanding demands from 10-15 years ago, the Department on Saturday clarified that it has requested taxpayers to respond to notifications regarding outstanding tax demands from previous years.


Tax refund delay due to previous demands: Income Tax department

“The taxpayer is required to agree, disagree or clarify the status of the demand. Accordingly, taxpayers with existing demand(s) in the previous years are being intimated of the same,” Finance Ministry said. This is a taxpayer-friendly measure where an opportunity is being provided in line with principles of natural justice, claimed the finance ministry.


It said in a statement that Section 245(1) of Income-tax Act, 1961, mandates providing of an opportunity to the taxpayer to make a representation before adjusting the refund against an existing demand.


“Taxpayers are requested to avail this opportunity and respond to such intimations to enable cleaning up/reconciliation of pending demands and facilitate timely issue of refunds,” the tax department stated.


According to the Government, so far, 7.09 crore income tax returns have been filed for the 2022-23 fiscal year, with 6.46 crore returns processed and 2.75 crore refund returns issued.

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