Outstanding Tax Demand

An Outstanding Tax Demand refers to the portion of tax that remains unpaid after a taxpayer has filed their return. This situation may arise when the tax paid is lower than what is actually due, when assessments reveal additional liabilities, or when interest and penalties accumulate because of delays. The demand generally consists of the pending tax amount along with any related charges. Tax authorities issue such demands when discrepancies or shortfalls are identified.

Example: If a person’s actual tax liability is ₹1,00,000 but only ₹70,000 has been deposited, the remaining ₹30,000—plus any applicable interest or penalties—constitutes the outstanding demand.