Response to Outstanding demand u/s 154

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A salaried individual filed their AY 2023-24 income tax return under the new tax regime but failed to submit Form 10IE beforehand. Consequently, the tax department processed the return under the old regime, raising a demand of Rs 53,085 due to the discrepancy. A rectification request submitted later was also denied. The individual is seeking solutions to resolve this outstanding demand, as it hasn't been adjusted against their AY 2024-25 refund.

sreeja reddy

sreeja reddy (Querist)
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04 March 2025 One of my client who is salaried, has filed the ITR for the AY 2023-24 on 30/7/2023 by selecting the new tax regime in the ITR form, but failed to file Form 10IE before filing the ITR.The return was processed in Dec 2023. A demand was raised by the Dept in December 2023 calculating the tax liability under Old tax regime, because of failure to file Form 10IE.

Now, the difference between the tax liability calculated by dept under old regime and new regime = Rs 53,085. (which needs to be paid)

A rectification request is been submitted by the client in August 2024 but the client received Rectification order u/s 154 in October 2024 to pay the above amount.

Further after, for the next AY i,e AY 2024-25, this demand had no reference in that Intimation order

What can be the possible solutions for this issue.

It would be a great help if anyone can provide me the possible solution about how to proceed for the same .

Thank You.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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05 March 2025 As such the outstanding will get adjusted from the refund due in consequent year/s; unless you pay it directly.

sreeja reddy

sreeja reddy (Querist)
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12 March 2025 Thank you for the response. Client has not paid the demand when it is received. Also,It has not been adjusted from the refund of AY 2024-25. Is there any solution to close this without paying it like submitting rectification request ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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12 March 2025 No action possible to close it, as of now.

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