Demand notices are issued by the income tax department upon verification of the income tax return filed when it sees that the income tax paid by an assesse is less than what he or she actually owes to the department based on the income declarations made in the ITR. So, if you also happen to receive any such demand notice of say between Rs. 1 to Rs. 99, you need to clear your tax dues. Nonetheless, section 143(1) specifies that demand of below Rs. 100 is not enforced and can be adjusted against refunds due in the future course of time.
You need to here know of the three scenarios:
When the assessee finds demand notice to be correct:
When after evaluating the notice, the assessee finds the demand to be correct; he or she still needs to intimate the department about the situation with valid proof. Say after fulfilling the demand, you need to mention challan identification number, BSR code, date of payment, the serial number of the challan and the amount. In a case when the tax department has already lowered the demand amount, you need to give in all such details including date of the order, amount of demand and details of income tax officer who has brought about the rectification.
Another scenario can be that your demand has already been deducted through appellate order, but the appeal effect has to be provided by the income tax department. In such a situation, you need to provide date of order plus the order passed by the appellate authority. Furthermore, if a revised return has been filed with the CPC, you need to give such details including e-filing acknowledgement number, filing type, remarks, TDS certificate, challan copy, request letter for rectification copy and indemnity bond where the assessing officer has made the rectification.
When the assessee partially disagrees with the demand:
In such a situation, you need to specify the amount that is correct and also the amount that is incorrect. However, you need to give valid proof as relevant documents against your partial disagreement towards the demand.
When the assessee totally disagrees with the demand notice:
If you completely disagree with the demand, then you can always choose the option of disagreement but need to provide details along with valid reasons. Herein you need to note that once the demand has been agreed upon or accepted, you cannot deny or disagree with it.
The process to check your demand notice
-Go to e-filing portal. Login into your e-filing account by entering your user ID and password
-After your e-filing account opens, click on ‘E-file' and choose the option given as ‘Respond to Outstanding Tax Demand'.
-Details including demand notification number, date when the demand was raised, assessment year, the outstanding amount payable or receivable, rectification rights, response etc will be shown. After reviewing the information, you need to submit your response.
Note that demand notices with payments below Rs. 100 can be adjusted in subsequent ITR filing. But if the demand notice is for payment over Rs. 100, you should respond to the notice with your submissions within 30 days of the receipt of the notice.
So, if you also happen to come across any such demand notice of between Rs. 1 to Rs. 99, make sure to be ready with your ITR and tax payment details such that you can take the decision on the demand raised by the department. If the demand is correct, clear the dues with no delays.