Refund kept on hold u/s 245 even after rectification of return

Save Share

This query is : Resolved

Quick Summary

If your Income Tax refund for AY 21-22 is being held under Section 245 due to an outstanding demand from AY 20-21, and you've since rectified the AY 20-21 return to show no tax payable, there are steps you can take. Ensure the rectification is fully processed and updated in the system. If the refund remains on hold, consider raising a formal grievance on the e-Filing portal or contacting your jurisdictional Assessing Officer directly with proof of your rectified return. Persistent follow-up is key to resolving such delays.

It is That is

It is That is (Querist)
Follow

20 July 2022 There was a mistake in AY 20-21 return thus leading to some excess amount payable. Hence the refund for AY 21-22 was kept on hold after issuing intimation u/s 245. Within 30 days response to the intimation was filed by rectifying the return for AY 20-21 and the same was processed in few months.
Now that return of AY 20-21 is rectified with no tax payable, when will the refund that was kept on hold for AY 21-22 be released? I already tried raising grievance but no response.
What is to be done? Somebody who's faced similar issue pls guide?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
Follow

21 July 2022 Contact CPC helpline.......

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
Follow

20 July 2025 When a refund for AY 21-22 is kept on hold under Section 245 (Adjustment of Refund against Outstanding Demand) due to an outstanding demand in AY 20-21, and you've rectified AY 20-21 return showing no tax payable, the refund release depends on the income tax department updating their records and clearing the adjustment.

Here’s what you can do:

Confirm the rectification is fully processed:
Even though you say the rectification for AY 20-21 was processed, check your intimation/upon rectification order carefully to confirm no outstanding demand remains and that the correction is updated in the CPC system.
File a grievance / refund reissue request online:
If the system still shows refund on hold, log in to Income Tax e-Filing portal → ‘e-Nivaran’ or ‘Grievance Redressal’ → Raise a complaint about refund held under Section 245 despite rectification.
Approach jurisdictional Assessing Officer (AO):
Sometimes CPC delays or system glitches occur. Write a formal letter/email to your AO explaining:
The rectification of AY 20-21 was accepted and processed with no outstanding demand
Refund for AY 21-22 is kept on hold wrongly
Request AO’s intervention to release the refund immediately
Follow up persistently:
Keep copies of all correspondence and grievance ticket numbers. Follow up regularly with AO and CPC.
Why does delay happen?
The system sometimes takes time to update records after rectification.
Automated Section 245 holds are system-based, so manual intervention by AO or CPC may be needed.
CPC grievance redressal can take time and may require escalation.
Summary:
Rectify AY 20-21 correctly (done)
Raise grievance on portal (done but no response)
Write to jurisdictional AO with proof of rectification
Follow up persistently

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now