Income Tax Department of India has urged taxpayers to address any outstanding tax demands from previous years in order to facilitate faster clearance of refunds for the 2022-23 fiscal.

Current update:

As of September 25, 2023, the Income Tax Department has processed over 6.46 crore income tax returns (ITRs) for the 2022-23 fiscal, of which 2.75 crore returns have resulted in refunds. However, there are still a number of cases where refunds are pending due to outstanding tax demands from previous years.

Why should you address past tax demands?

There are a number of reasons why you should address past tax demands, including:

  • Faster refund processing: If you have an outstanding tax demand, the Income Tax Department will first adjust your refund against that demand. This can delay the processing of your refund. By addressing the demand upfront, you can ensure that you receive your refund faster.
  • Avoidance of interest and penalties: If you do not pay an outstanding tax demand within the specified time, you will be charged interest and penalties. Addressing the demand upfront can help you to avoid these additional charges.
  • Compliance with tax laws: It is important to comply with all tax laws, including the payment of outstanding tax demands. By addressing past tax demands, you can ensure that you are in compliance with the law and avoid any future legal complications.

How to address past tax demands:

If you have received an intimation from the Income Tax Department regarding an outstanding tax demand from a previous year, you can take the following steps to address it:

  1. Log in to your e-filing account on the Income Tax Department website.
  2. Go to the My Account tab and select View Demanding Letters.
  3. Click on the demand letter for the year in question.
  4. Review the demand details and pay the outstanding tax online using your net banking account or credit/debit card.

Once you have paid the outstanding tax, you can submit a revised ITR for the year in question. This will help to expedite the processing of your refund.

What if you disagree with the outstanding tax demand?

If you disagree with the outstanding tax demand, you can file a rectification request with the Income Tax Department. You will need to provide supporting documentation to support your claim. If your rectification request is approved, the outstanding tax demand will be reduced or waived altogether.

Addressing past tax demands is an important step that all taxpayers should take. By doing so, you can ensure that you receive your refund faster, avoid additional charges, and comply with tax laws.

Additional tips for addressing past tax demands:

It is important to note that the Income Tax Department is committed to helping taxpayers comply with tax laws.