New Delhi, July 9 -- If you have received an intimation under Section 245 of the Income Tax Act, 1961, it does not necessarily mean you have done something wrong. It simply means the Income Tax Department intends to adjust your income tax refund against an outstanding tax demand from an earlier financial year.

Here's what a Section 245 intimation means, why it is issued, and how you should respond.

A Section 245 intimation is issued when the Income Tax Department finds that:

For example, suppose you are due a refund of Rs.12,000 for FY 2025-26, but there is an unpaid tax demand of Rs.8,000 for FY 2022-23 because of a mismatch in tax credits or unpaid tax liability. In that case, the department may issue a Section 245 intimation proposi...