Tax Deposited in Cash Ledger, Not set off during Return Filing & Interest demanded: Know Consequences & Draft Reply Format

The Taxscan article explains the scenario where cash deposits in a taxpayer's cash ledger cannot be set off against the tax liability when filing a return. This issue arises when taxpayers deposit funds into the cash ledger but later seek to adjust these against their taxes. The article elaborates on the consequences of such actions, including the potential for interest demands if the deposit isn't properly adjusted. It also provides a draft reply format for taxpayers to use when responding to such demands, highlighting key details to ensure accurate and clear communication with tax authorities.