Waiting for income tax refund? You might not get it if tax department has sent you notice
An individual may not get the income tax refund claimed while filing income tax return (ITR) if the income tax department has sent a tax notice under Section 245 of the Income Tax Act, 1961. This tax notice is sent to inform the individuals that the income tax department will not credit the tax refund amount (either fully or partially) and that it will set it off against the pending income tax liability from past years. An example of this is of an individual with an outstanding tax demand in AY 2002-03 and income tax refund in AY 2023-24 is being set off now.
The income tax department via its official account on X (formerly known as Twitter) said, “There are a few cases in which refunds are due to the taxpayer, but previous demands are outstanding. Section 245(1) of the Income-tax Act, 1961, mandates providing an opportunity to the taxpayer to make a representation before adjusting the refund against an existing demand. Accordingly, taxpayers with existing demand(s) in the previous years are being intimated of the same.”