Introduction

Section 245 of the Income Tax Act allows the tax department to adjust any tax refund due to a taxpayer against pending demands from previous years. Before making such an adjustment, the department must issue a notice informing the taxpayer about the action. This is called a Section 245 adjustment notice.

• Purpose and scope of Section 245
  
• When and why the notice is issued
  
• Format and contents of the notice
  
• Process of verifying outstanding demand
  
• Responding to the notice and raising objections
  
• How to check demand status on the income tax portal
  
• Timelines for response and refund adjustment
  
• Impact of ignoring a Section 245 notice
  

Conclusion

A Section 245 notice serves as a reminder that old tax dues can affect current refunds. Timely verification and clarification are necessary to avoid wrongful adjustments and to ensure rightful refunds are received without delay.