Response to Section 245 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Response to Section 245 Notice (Set-Off of Refund Against Demand) — Template
Ready-to-use draft reply template for intimation under Section 245 proposing set-off of refund against outstanding demand under the Income Tax Act. Includes format, legal references, and compliance notes. Illustrative only — customize based on your specific case facts and professional advice.
Response Deadline: As specified in the notice (typically 15-30 days)
Filing: E-filing portal (incometax.gov.in) → Pending Actions → Response to Notices
When Do You Receive This Notice?
intimation under Section 245 proposing set-off of refund against outstanding demand is issued by the Assessing Officer / CPC when Section 245 provisions are triggered. You must respond within the time specified in the notice — failure to respond can result in best judgment assessment, penalty, and prosecution.
Draft Reply
Subject: Response to Intimation u/s 245 — PAN: — AY
Respected Sir/Madam,
I/we have received the intimation under Section 245 proposing set-off of refund of Rs. (AY ) against outstanding demand of Rs. (AY ).
Option 1 — If agreeing: I/we have no objection to the proposed set-off.
Option 2 — If disagreeing: I/we disagree with the proposed set-off for the following reasons: (a) The demand for AY is disputed and appeal is pending. (b) Rectification application u/s 154 has been filed for AY . (c) The demand is incorrect — . I/we request that the refund be released without set-off.
| | Date:
Key Compliance Notes
Key: (a) AO must give intimation BEFORE set-off (Section 245 — mandatory). (b) If demand is disputed: respond within deadline objecting to set-off. (c) If demand has been appealed: mention appeal details. (d) If demand is incorrect: file 154 rectification AND respond to 245 notice. (e) Non-response = deemed consent for set-off.
Documents to Attach
| # | Document | Purpose |
|---|---|---|
| 1 | Copy of the notice received | Reference |
| 2 | Copy of ITR filed for the relevant AY | Proof of filing |
| 3 | Computation of income with supporting schedules | Substantiation |
| 4 | All documentary evidence supporting your position | Evidence |
| 5 | Bank statements, Form 26AS, AIS for the relevant period | Verification |
Key Facts About Response to Section 245
- Applies in: All states across India, under the relevant central law.
- Mode: Mostly online via the official government portal.
- Typical timeline: Ranges from a few days to a few weeks depending on the case.
- Non-compliance: May attract penalties, interest or late fees.
- Expert help: TaxClue completes the entire process end to end for you.
What is Response to Section 245?
Response to Section 245 is an important compliance and legal topic for businesses and individuals in India. This guide explains its meaning, applicability and key requirements in simple language so you can understand and stay fully compliant.
Who needs to know about Response to Section 245?
Business owners, startups, professionals, and taxpayers dealing with Response to Section 245 should understand the applicable rules. Requirements can vary by turnover, entity type and activity, so it is best to confirm your specific case before proceeding.
Over 90% of compliance penalties in India arise from missed due dates — timely handling can save businesses thousands of rupees each year.
Response to Section 245: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.
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Why This Matters
Staying compliant with Indian regulations protects your business from penalties, interest and unnecessary legal trouble. It is always wise to maintain proper records and documentation so that any future scrutiny can be handled smoothly. Rules and thresholds in income tax are revised periodically, so it helps to review your obligations at the start of each financial year.