DFC from the Income Tax Department can help resolve older unpaid tax issues

While not many taxpayers may be aware of this fact, it should be noted that under Section 245 of the Income Tax Act, 1961, the income tax department can deduct old tax claims from the current year’s tax return. In this case, the IT department can send a Section 245 notice covering the details of the old tax requirements from the past year. The problem here is basically that individuals often don’t remember this old data, making it difficult to adjust their unpaid dues with current income tax refunds. To help address this issue, the Income Tax Department has recently launched Demand Facilitation Centers (DFCs) in several states.

To assist individuals facing data challenges on old tax returns, DFC serves as a resource to help resolve any outstanding fees by utilizing their income tax refund for the current year. Among other things, the program is designed to address the common problem of individuals receiving long-forgotten Section 245 notices on their tax returns.

If you have also received a Section 245 notice and need assistance from the DFC, please scroll further to learn about these concepts in more detail.

Regarding Article 245 and DFC

Section 245 authorizes the income tax department to use the taxpayer’s income tax refund for the current year to adjust unpaid income tax for previous years.

At this point, the DFC steps in to help individuals who have difficulty recalling details from their old returns. Currently, DFC is operational in states such as Karnataka, Punjab, Haryana, Himachal Pradesh, Tamil Nadu, Chandigarh, Delhi, Mumbai and others.

How DFC can help

1. Obvious errors in records: When there are obvious errors in records, taxpayers can seek help from the DFC. For example, discrepancies in challan number during ITR filing or incorrect TDS amount due to bank error can be resolved through DFC.

2. CPC has rectification powers: If the Section 245 Income Tax Demand Notice states that the Central Processing Center has “rectification powers”, they can seek assistance. However, if the right of rectification lies with the Assessing Officer (AO), then they have to contact the AO directly.

How to approach DFC?

After receiving a Section 245 tax demand notice, taxpayers may receive a phone call or email from DFC. The officer can contact you via phone number (+91 8216671200) or send an email via ID (taxdemand@cpc.venuetax.gov.in).

On the other hand, individuals can be contacted via the toll-free number 1800 309 0130. It is important to note that DFC does not seek personal login credentials, bank passwords or OTPs to file with their ITRs.