Income Tax Department's DFC Can Help Address Issues With Older Outstanding Taxes

While not many taxpayers might be aware of the fact, it should be noted that the income tax department can deduct an old tax demand from the current year’s tax return under Section 245 of the Income Tax Act 1961. In such cases, the I-T department can send Section 245 notice, pertaining to the past year’s details of the older tax demands. The problem here basically occurs as individuals usually don’t remember such old data and thus struggle to adjust their outstanding dues with the present income tax refund. To help solve the issue and address the same, the Income Tax Department recently launched the Demand Facilitation Centre (DFC) in a few states.

With an aim to assist individuals facing challenges with older tax return data, the DFC serves as a resource to help resolve any outstanding dues by utilising the current year’s income tax refund. Besides that, the initiative also seeks to address the common issue of individuals receiving Section 245 notice for long-forgotten tax returns.

If you have also received notice under Section 245 and require assistance from DFC, scroll further to understand the concepts in more detail.

About Section 245 and DFC

Section 245 empowers the income tax department to adjust past years’ outstanding income tax dues with the present year’s income tax refund of the taxpayers.

This is when the DFC steps in to help individuals struggling with recalling details from older returns. Presently, the DFC is operational in states including Karnataka, Punjab, Haryana, Himachal Pradesh, Tamil Nadu, Chandigarh, Delhi, Mumbai, and others.

Conditions when DFC can help

1. Apparent mistakes from the record: Taxpayers can seek help from DFC when there are apparent mistakes in records. For instance, discrepancies in challan numbers during ITR filing or incorrect TDS amounts due to banking errors can be addressed with DFC.

2. Rectification rights are with the CPC: If the Section 245 income tax demand notice indicates ‘rectification rights’ with the Centralised Processing Centre, they can seek assistance. However, if the rectification right is with the Assessing Officer (AO), they must approach the AO directly.

How to approach DFC?

Upon receiving the Section 245 tax demand notice, taxpayers might receive a call or mail from DFC. Officials can contact you through the number (+91 8216671200) or send an email from the ID ([email protected]).

On the other hand, individuals can reach out through the toll-free number 1800 309 0130. It is to be noted that DFC does not seek their ITR-filing personal login credentials, banking passwords, or OTPs.