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: [PAN] — AY [Year]
Respected Sir/Madam,
I/we have received the intimation under Section 245 proposing set-off of refund of Rs. [Amount] (AY [Refund Year]) against outstanding demand of Rs. [Amount] (AY [Demand Year]).
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 [Year] is disputed and appeal is pending. (b) Rectification application u/s 154 has been filed for AY [Year]. (c) The demand is incorrect — [reasons]. I/we request that the refund be released without set-off.
[Name] | [PAN] | Date: [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 |