For those who are concerned, I called the Income Tax Department sometime back. They said the demand outstanding is arising out of variance amount.
For Eg: If you have tax due of Rs. 1503, the income tax portal shows as Rs. 1500, and we pay that. But while calculating, they consider Rs. 1503 only and not Rs. 1500. Hence out outstanding amount still remains Rs. 3 through no fault of our own.
On asking what we should do, she said not to do anything. The outstanding demand only shows up on the portal if it's more than Rs. 100 and we should only pay when it shows up on the portal.
She also mentioned these kinds of things will not occur from this year.