Income tax · Intimation
Intimation of set-off of refund against demand (Section 245)
A refund due to you is proposed to be set off against a sum remaining payable under the Income-tax Act 1961 or the Income-tax Act 2025. What to do: check whether the demand it refers to is correct, then respond: "Demand is correct" or "Disagree with demand". The notice states the date — read it from the document.
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Key facts
A refund due to you is proposed to be set off against a sum remaining payable under the Income-tax Act 1961 or the Income-tax Act 2025. The Act requires an intimation in writing of the proposed action before the set-off; the portal prints it as "Intimation under section 245 (adjustment against demand)".
| Notice | Intimation of set-off of refund against demand (Section 245) |
|---|---|
| Issued by | The Income Tax Department (the authority named on the notice) |
| Issued under | Section 245(1), Income-tax Act 1961 |
| Income-tax Act 2025 | Section 438(1) and (2), Income-tax Act 2025 |
| What it asks of you | A reply, within the time allowed |
| Your time to act | The notice states the date — read it from the document. |
| If it is ignored | If the demand stands, the refund is set off against it. |
Time allowed
The notice states the date — read it from the document. The Act fixes no response period for this intimation and the portal states none: respond by any date the intimation itself states. A fixed period is to be confirmed with our expert team.
The date stated on your notice always wins.
What to do now
Check whether the demand it refers to is correct
Open Pending Actions > Response to Outstanding Demand; the Section 245 intimations can be downloaded there. Match the demand to its order and to tax already paid.
Respond: "Demand is correct" or "Disagree with demand"
Give the challan details if already paid, or the reasons for disagreeing, in full or in part, paying any undisputed part. The portal warns that once you submit "Demand is correct" you cannot disagree later.
Rectify or appeal the demand itself where it is wrong
A mistake apparent from the record is rectified under Section 154; an order under appeal may be stayed at the Assessing Officer's discretion (Section 220(6)).
Check the Document Identification Number (DIN)
Every notice, order or letter should be referenced by a computer-generated DIN, in its body, in a covering document or in the covering e-mail (CBDT Circular 4/2026, which withdrew Circular 19/2019). A missing DIN is a point to raise with our expert team; by itself it does not invalidate an assessment that is referenced by a DIN in any manner (Section 292BA).
What a reply contains
A reply usually covers the points below. This is an outline, not a draft: our expert team writes it on your own records.
- Reference: the intimation's reference number and date, your PAN and the period it covers.
- An answer to each point the intimation raises, in the same order, saying what you accept and what you dispute.
- Evidence for each point: the returns, books and documents each answer relies on.
- Where it is filed: as stated on the intimation.
If it is ignored
- If the demand stands, the refund is set off against it.
- Where an assessment or reassessment is pending, the refund may be withheld, with the Commissioner's approval, for up to 60 days from the date that assessment is made (Section 245(2)).
Official sources
Sources checked on 22 October 2026.
- Income-tax Act 1961, section 245 · read 22 October 2026
- e-filing portal help: response to outstanding demand · read 22 October 2026
Frequently asked questions
What is an income-tax Section 245 intimation?
A refund due to you is proposed to be set off against a sum remaining payable under the Income-tax Act 1961 or the Income-tax Act 2025. The Act requires an intimation in writing of the proposed action before the set-off; the portal prints it as "Intimation under section 245 (adjustment against demand)".
How much time do I have to act on an income-tax Section 245 intimation?
The notice states the date — read it from the document. The Act fixes no response period for this intimation and the portal states none: respond by any date the intimation itself states. A fixed period is to be confirmed with our expert team. The date stated on your notice always wins.
What happens if I ignore an income-tax Section 245 intimation?
If the demand stands, the refund is set off against it. Where an assessment or reassessment is pending, the refund may be withheld, with the Commissioner's approval, for up to 60 days from the date that assessment is made (Section 245(2)).
Related guides
General information from the provisions this notice is issued under, not legal advice. The dates and periods stated on your notice always win. Our expert team can read the full notice with you.