Outstanding Demand in Income Tax: How To Respond?

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Mitali

Finance Professional

45979 Points Posted on 17 August 2026

How to Check Outstanding Tax Demand?

Log in to www.incometax.gov.in using your user ID and password.
Go to Pending Actions -> Response to Outstanding Demand - if there is any outstanding demands, it will be displayed.
Review the demand and the related notice or order before taking action.

What If the Demand Is Correct?

If the demand is correct and you have not yet paid, then you can select Demand is Correct and make the payment through the Pay Now option.

What If You Disagree With the Demand?

If you believe the d
emand is incorrect, you can choose select Disagree with the demand (Either in full or in Part) option and can provide the relevant reason and details.

What If You Have Already Paid?

If the demand has already been paid, you can submit the challan details while responding to the outstanding demand.
To add the challan details, select Type of Payment (minor head), enter Challan Amount, BSR Code, Serial Number and select Date of Payment.
Click Attachment to upload the copy of the challan (PDF) and click Save.

Replies (3)

Quick Summary

If you've received an outstanding tax demand notice, the first step is to log in to the income tax portal to review the details and the reason for the demand. You can then choose to pay the demand if it's correct, provide challan details if you've already paid, or dispute the demand by providing reasons and supporting documents. For factual errors, a Section 154 rectification request may be appropriate, while legal disagreements might require an appeal.

Aashok Kumar Sharma

Finance/Compliance Consultant

77730 Points Posted on 17 August 2026

Check the demand under Pending Actions > Response to Outstanding Demand. If valid, pay via Pay Now; if already paid, enter the Challan details (BSR Code, Serial Number, Date, Amount); if incorrect, select Disagree with Demand, attach supporting proofs, and file a Section 154 Rectification request if applicable.

Tax Garden

Tax Consultant

2084 Points Posted on 18 August 2026

Outstanding demands under Section 143(1) in AY 2026-27 usually come from TDS mismatch between Form 26AS and the ITR, deduction disallowances, or old unresponded demands.

Steps to respond:

1. CHECK THE NOTICE: Log in to incometax.gov.in, go to e-File > Respond to Outstanding Demand. The portal shows the exact computation behind the demand.

2. IDENTIFY THE CAUSE: Match the demand against your ITR computation. Section 143(1) intimations are factual. Section 143(3) scrutiny demands need professional handling.

3. RESPOND ON PORTAL:
- Demand is correct: Pay the challan linked in the notice.
- Already paid: Enter BSR code, serial number, and payment date from your challan.
- Partially agree: Split response on portal and file Section 154 rectification for the incorrect portion.
- Fully disagree: Section 154 (factual error) or CIT-A appeal (legal question).

Key timing: For Section 245 notices (refund adjustment), respond within 30 days. A non-response allows automatic refund set-off.

For factual errors (wrong TDS credit, wrong assessment year), Section 154 rectification is faster than an appeal and can be filed on the portal directly. This [guide on common ITR filing mistakes and demand notices](https://taxgarden.in/blog/common-itr-filing-mistakes-refund-delay-notices-ay-2026-27) covers the exact portal steps for the most common demand scenarios.

Rushabh

Automation Expert

9182 Points Posted on 13 November 2026

Review the demand notice or order under Pending Actions → Response to Outstanding Demand on the e-filing portal. If the demand is correct and unpaid, select Demand is correct and proceed to payment. If you dispute it fully or partly, select the relevant disagreement option and provide the reasons and details. If already paid, submit the payment details—minor head, amount, BSR code, challan serial number and payment date—and attach the challan copy as a PDF. Ensure the response and supporting details match the underlying records.

This response process fits naturally into tax-demand tracking and reconciliation workflows. Manual review of notices, payment records and challans can be difficult; automation reduces repetitive work while professional judgment remains in control. Our platform offers 2,000+ AI agents and 650+ integrations covering only relevant workflows. For a walkthrough tailored to your practice, connect with us on WhatsApp at https://wa.me/message/3HVOZ7HIY4ESC1.