Section 245 → Section 281
Set off of refunds against tax remaining payable
Quick Answer
Section 245 of the Income Tax Act, 1961 (Set off of refunds against tax remaining payable) corresponds to Section 281 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective 1st April 2026. Status: Retained.
Sec 245
Provision Summary
Allows the department to adjust a refund due to the taxpayer against any old outstanding tax demand.
Sec 281
Provision Summary
Retained. A prior intimation notice (under Section 245) is sent to the taxpayer, giving them 30 days to respond/object before adjustment.
Key Changes & Highlights
- Adjustment process is now fully automated via CPC and visible on the 'Response to Outstanding Demand' portal.
Frequently Asked Questions
What does Section 245 of the Income Tax Act 1961 deal with?
Section 245 (Set off of refunds against tax remaining payable) Allows the department to adjust a refund due to the taxpayer against any old outstanding tax demand.
What is the new section number for Section 245 under the Direct Tax Code 2025?
Section 245 of the ITA 1961 maps to Section 281 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective from 1st April 2026.
What is the status of Section 245 under the new tax code?
Section 245 is marked as "Retained" with status "Active". Impact: High - Major hurdle in getting cash refunds if old disputes exist.
What are the key changes to Section 245 under DTC 2025?
Adjustment process is now fully automated via CPC and visible on the 'Response to Outstanding Demand' portal.
Disclaimer: This page is for educational and reference purposes only. Section mappings are based on publicly available drafts and circulars. Always consult a qualified Chartered Accountant before filing or making compliance decisions under the Direct Tax Code 2025.
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