01 August 2024
Under Section 245 of the Income Tax Act, 1961, the demand notice sent by the Income Tax Department provides details about the amount payable by the taxpayer.
### **Understanding Intimation Under Section 245**
**Section 245** deals with the adjustment of refunds against outstanding tax demands. When you receive an intimation or notice under this section:
1. **Amount Payable**: - The amount payable mentioned in the notice under Section 245 **does include** the interest component. This means that the total amount shown as payable accounts for both the principal tax amount and any interest or penalties due.
2. **Interest Component**: - The interest component is part of the total demand and will be reflected in the notice. Interest under sections like 234A, 234B, 234C, or under Section 220(2) for late payment or under Section 271F for late filing, if applicable, will be included in the total demand amount.
3. **Breakdown of Demand**: - The intimation should provide a detailed breakdown of the demand, including the principal tax amount, interest, and penalties, if any. If the notice or intimation does not provide a clear breakdown, you should seek clarification from the Income Tax Department or your tax advisor.
### **Action Steps if You Receive a Demand Under Section 245**
1. **Verify the Demand**: Check the details provided in the intimation carefully to ensure accuracy in the computation of the demand, including interest. 2. **Adjust Refunds**: If there is an outstanding demand, your refund for the current assessment year can be adjusted against this demand. 3. **Contact the Department**: If you have any doubts or discrepancies, contact the Income Tax Department for clarification. 4. **Pay the Demand**: Ensure that you pay the total amount mentioned in the notice to avoid further penalties or interest.
If you need detailed clarification on your specific case, consulting a tax professional or advisor would be beneficial.
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