Outstanding Income Tax demand arises when taxpayer’s tax as per Income Tax Return is less than the tax payable as per Income Tax Department.

ITD sends the intimation under Section 143(1) asking for outstanding demand along with the calculations, stating the reason why you need to pay more tax.

You can go through the calculations and pay the outstanding tax if you agree or disagree the outstanding demand.

Perform the following steps for online payment of outstanding tax demand.

Step 1 Logon to ‘e-Filing’ Portal www.incometaxindiaefiling.gov.in
Step 2 Go to the ‘e-File’ menu located at upper-left side of the page ⇒ Click ‘Response to Outstanding Tax Demand’
Step 3 Click the hyperlink Submit located under Response column (To respond Outstanding Tax Demand)
Step 4 Taxpayer has to select one of the following options from the radio button:

  • Demand is correct (Once confirmed then you cannot ‘Dis-agree with the Demand’)
  • Demand is partially correct (Enter the both amount which is correct and which is incorrect)
  • Disagree with the Demand(Provide the details for disagreement along with reasons)
  • Demand is not correct but agree for adjustment (Once confirmed then you cannot Dis-agree with the Demand)

More about all these four options is as follows-

  • Demand is Correct
    • Refund will adjust with outstanding demand
  • Demand is Partially Correct
    If taxpayer selects ‘Demand is partially correct’ then he should mandatorily fill one or more reasons for stating so as listed below:

    • Demand Paid – Demand paid and Challan has Challan Identification Number (CIN)
    • Demand has already been reduced by rectification/revision
    • Demand has already been r educed by Appellate Order but appeal effect has to be given by Department
    • Appeal has been filed and
    • Stay petition has been filed with
    • Stay has been granted by
    • Instalment has been granted by
    • Rectification/Revised Return has been filed at CPC
    • Rectification has been filed with Assessing Officer
    • Others
  • Disagree with Demand

If taxpayer selects ‘Disagree with the Demand’, then taxpayer must furnish the details of disagreement along with reasons. Details/Reasons are same as provided under ‘Demand is partially correct’.

  • Demand is not correct but agree for adjustment

If taxpayer selects ‘Demand is not correct but agree for adjustment’, then taxpayer should mandatorily fill one or more reasons for stating so. Details/Reasons are same as provided under ‘Demand is partially correct’

Step 5 Click ‘Submit’
Step 6 A success message along with Transaction ID is displayed on successful submission of the response.

  • To View the submitted response go to ‘e-File’ ⇒ ‘Response to Outstanding Demand’ and click on the ‘View’ link under the ‘Response’ column and in the new page click on the ‘Transaction Id’ hyperlink.
  • For the demand which is shown to be uploaded by AO, then the rectification right is with Assessing Officer and for the demand against which there is no ‘Submit’ response available is already confirmed by the Assessing Officer. Kindly contact your jurisdictional Assessing Officer for clarification.

(Republished with Amendments)

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January 2021