Responding to an Outstanding Tax Demand on the Portal

Every income tax demand raised against your PAN appears under Pending Actions > Response to Outstanding Demand on incometax.gov.in, with the status Pending payment / Response. You have two choices for each demand: Demand is Correct, or Disagree with demand (Either in Full or Part) and give your reasons. If you do neither, the department treats the demand as confirmed and can adjust it against any refund due to you.

Older guides describe a longer menu with a separate "partially correct" option. The portal's current user manual shows only the two choices above; a partly wrong demand goes under the disagreement, with the reasons and amounts entered there.

Before you respond: read the demand row

Each demand on the screen shows the details you need to decide:

• Assessment year and the section under which it was raised, usually 143(1) for a CPC intimation, 154 for a rectification order, or 143(3) for a scrutiny assessment.
• DIN (Document Identification Number) and the date the demand was raised.
• Demand amount and the interest accrued on it. Interest runs at 1% a month or part of a month under section 220(2) once the 30 days for payment have passed.
• Rectification rights, which say whether CPC or your Assessing Officer can correct it. This decides where a rectification request goes.

Then open the order behind it. For a 143(1) demand, that is the intimation: compare the column with your return's figures against the column with CPC's figures, and the first row where they differ is where the demand starts. How to read your 143(1) intimation line by line walks through each part.

Option 1: you agree

If the demand is right, click Submit Response and choose Demand is Correct. The portal warns that once you submit this, you can't disagree with the demand later, so be sure first. Then pick one of two paths:

• Not paid yet. Click Pay Now and pay on the e-Pay Tax page. You can also click Pay Now against the demand without submitting a response.
• Already paid, and the challan has a CIN. Click Add Challan Details and enter the minor head, amount, BSR code, challan serial number and date of payment, with a PDF copy of the challan (up to 5 MB).

Paying through Pay Now carries the Demand Reference Number into the challan with the minor head for a demand payment (400, regular assessment tax), so the payment is matched to the demand.

You can pay online through net banking, debit card or the payment gateway (which includes UPI and cards of other banks), or offline through NEFT/RTGS or over the counter at an authorised bank.

The usual mistake here is paying a demand as self-assessment tax (minor head 300) through the general e-Pay Tax screen. The money reaches the government but does not close the demand by itself. If that happened, give the challan details through the already-paid path above, and see challan mistakes and the challan correction service.

Option 2: you disagree in full or in part

1. Go to Pending Actions > Response to Outstanding Demand and click Submit Response against the demand.
2. Choose Disagree with demand (Either in Full or Part) and click Add Reasons.
3. Select one or more reasons from the list the portal shows and click Apply. The list covers situations such as a rectification or revised return having been filed. Each reason asks for its own details, for example the acknowledgement number of the rectification or revised return.
4. If none of the reasons fits, select Others, explain in the text box and enter the amount you believe is not payable.
5. If you disagree only in part, click Pay Now to pay the remaining amount shown in the payment summary.
6. Click Submit, then Confirm, and note the Transaction ID. To check what you sent later, click View against the demand.

If you disagree with only part of the demand, the department's FAQ says to pay the undisputed portion. That stops interest on the part you accept and keeps the dispute limited to the amount in question.

If the portal says "No records found for revised/rectified return for the assessment year", try again later. If it keeps appearing, check the acknowledgement number of your rectification or revised return.

Worked example: a demand that is partly right

A CPC intimation for AY 2026-27 shows a demand of ₹31,200. Reading it line by line:

What to do:

1. Pay ₹9,360 against the demand with Pay Now.
2. File a rectification request with request type Reprocess the Return, since the TDS was claimed in your return and is now visible in Form 26AS.
3. Respond to the demand: Disagree with demand (Either in Full or Part), pick the reason for a rectification filed, give its acknowledgement number, and record ₹21,840 as the disputed amount.

When CPC processes the rectification, it issues an order under section 154 and the remaining demand should drop to nil.

What disagreeing does and does not do

Recording a disagreement tells the department your position before it adjusts the demand against a refund. It does not cancel the demand. Only a rectification order, a revised return being processed, an appellate order or a payment changes the amount. So a disagreement should always sit alongside one of those:

• Rectification for a mistake apparent from the record, filed where the rectification rights lie (CPC or the Assessing Officer).
• A revised return if your own return had errors and the time limit is still open.
• An appeal to the Commissioner (Appeals) if you dispute an adjustment that is not a simple mistake.

Rectification or revised return explains when each fits. Interest under section 220(2) is worked out on the demand as it finally stands, so if a rectification reduces the demand, the interest on the reduced part goes too.

If you ignore the demand

The department's FAQ is direct: if you do not respond, the demand is confirmed. It is then adjusted against any refund due to you, or remains payable if no refund is due. Before setting a refund off against an old demand, CPC sends an intimation under section 245 and gives you a chance to respond. That is a second opportunity to point out that the demand is wrong, and refund adjusted against an old demand covers how to handle it.

A demand of a few hundred rupees from years ago is still worth a response. Left alone, it can take a larger refund with it later.

If you track demands for several family members, myutils.me lists each PAN's outstanding demands with the DIN, dates, interest and rectification rights after you add the PAN or press Sync. Responses and payments are made on the portal itself.

FAQ

Where do I see all demands against my PAN?

Under Pending Actions > Response to Outstanding Demand after logging in to the e-Filing portal. You also receive the demand by email and SMS on your registered contacts.

How do I see the response I already submitted?

Click View against the demand on the same screen. The button appears only for demands where you have submitted at least one response.

Does disagreeing stop interest under section 220(2)?

No. Interest depends on the final amount of the demand. Paying the part you accept stops interest on that part. If the disputed part is cancelled by rectification or appeal, there is no interest on it.

The demand is from an assessment order, not CPC. Is the response the same?

The response screen is the same. The remedy differs: rectification goes to the Assessing Officer, and disputes on the merits go to appeal. For those, a chartered accountant's help is worth it.

Sources

• Income Tax Department: Respond to outstanding demand FAQs
• Income Tax Department: Response to outstanding demand user manual
• Income Tax Department: Raise rectification request FAQs
• Income Tax Department: Challan correction request user manual