Query Regarding Refund Adjustment Against Outstanding Demand

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This query is : Resolved

Quick Summary

If your income tax refund was previously adjusted against an outstanding demand that you have now fully paid, you are likely eligible to receive that refund back. Ensure the demand status is updated on the e-filing portal and then submit a grievance or a Section 154 Rectification Application with proof of payment to initiate the refund process. If the demand is paid but the associated interest is not, any future refund may be adjusted against this interest.

Suresh S. Tejwani

Suresh S. Tejwani (Querist)

05 August 2026 We had an outstanding income tax demand, and the corresponding interest was pending. The demand has now been fully paid. However, an earlier income tax refund was adjusted against this outstanding demand.

Could you please confirm whether we are now eligible to receive a refund of the amount that was previously adjusted against the outstanding demand, since the demand has already been paid?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

06 August 2026 Yes, you are entitled to get a refund of the excess amount created by paying the demand after it was already adjusted against a refund. Verify that the demand status is updated on the e-filing portal and submit a grievance under CPC-ITR (or file a Section 154 Rectification Application) attaching proof of payment to trigger the refund re-issue.

Suresh S. Tejwani

Suresh S. Tejwani (Querist)

06 August 2026 IF WE HAVE PAID DEMAND BUT INTEREST NOT PAID THAN NEXT YEAR REFUND CAN ADJUST AGAINST INTEREST OR RECIEVE REFUND BY TAXPAYER ?

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