How to adjustment demand from refund in income tax

If you have an outstanding income tax demand from a previous year, such as AY 2015-16, and are expecting a refund for a later year, like AY 2021-22, the Income Tax Department will typically adjust these automatically. You'll receive an intimation under section 143(1) detailing how your refund is used to offset the demand. To receive your full refund, ensure the earlier demand is settled.