Notice issue for demand under section 156 of the Income Tax Act 1961

Notice for demand under section 156 of the Income Tax Act 1961 may be issued by the Income Tax Department in the following cases:

1. Regular Assessement
2. Best Judgement Assessement under section 144 of Income Tax Act
3. Income Escapement Assessment under Section 147 of Income Tax Act and 148 of Income Tax Act
4. Penalty Assessement under section 271(1)(c) of Income Tax Act
5. Penalty Assessement under section 270A of Income Tax Act
6. Scrutiny Assessement

Income tax Demand notice under section 156 of the income tax act is issued when the Assessing Officer (A.O.) raises demand for any tax, interest, penalty, fine, or any other sum to be payable by you as a result of any order passed under the Income Tax Act.

Notice for sum payable u/s 143(1), 200A (1), 206CB (1) shall be deemed to be Notice of Demand u/s 156 of the income tax act.

The amount you pay under this notice shall be paid within 30 days of receipt. However, the A.O., in some cases if he has a reason to believe that allowing a period of thirty days will be detrimental to the Income Tax Department. with prior approval from the Joint Commissioner of Income Tax (JCIT), can ask you to deposit the amount in less than 30 days.

If any demand for tax, interest, penalty, fine or any other sum is raised by the Assessing Officer as per the provision of Income Tax Act, 1961 then he shall serve a notice of such demand to the assessee u/s 156 specifying the amount payable.

After completing the assessment or re-assessment process, the Income Tax Department takes on the responsibility of determining whether any additional amount needs to be paid by a taxpayer. In case, there is any outstanding liability, the department issues a demand notice under section 156 of the Income Tax Act. This notice specifies the interest, penalties, fines, and any other charges that the taxpayer must pay, along with a time limit for payment.

Notice for Outstanding Demand u/s 156?

Notice for income tax demand notice under section 156 of Income Tax act is a notice issued by the Assessing Officer when any tax, interest, penalty, fine, or any other sum is payable by the assessee as a result of any order passed under the Income Tax Act. The notice specifies the amount and the due date of payment, which is usually 30 days from the receipt of the notice.

in section 80-IAC, the tax or interest on such income included in the notice of demand referred to in sub-section (1) shall be payable by the assessee within fourteen days—

  (i) after the expiry of forty-eight months from the end of the relevant assessment year; or

 (ii) from the date of the sale of such specified security or sweat equity share by the assessee; or

(iii) from the date of the assessee ceasing to be the employee of the employer who allotted or transferred him such specified security or sweat equity share,

whichever is the earliest.

Format of Income Tax Demand Notice

As per Rule 15 of Income Tax Rules the notice of demand under section 156 shall be in Form No. 7 as follows:

How to Pay a Demand Under Section 156 of the Income Tax Act, 1961
When you receive a demand notice under Section 156 of the Income Tax Act, it indicates that you owe a certain amount to the Income Tax Department. Here’s how you can pay the demanded amount:

1. Understand the Demand Notice:

• Review the Details: Carefully examine the notice to understand the exact amount payable, the due date, and the designated bank or authorized agency for payment.
• Check for Errors: Verify the accuracy of the calculated demand. If you find any discrepancies, you can file an objection or appeal as per the prescribed procedures.

1. Choose a Payment Method:
   You can typically choose from the following methods:

• Online Payment:
• Net Banking: Use your net banking facility to transfer the amount directly to the designated bank account mentioned in the demand notice.
• Debit Card/Credit Card: Make an online payment using your debit or credit card through the Income Tax Department’s portal or authorized payment gateways.
• UPI: Utilize the Unified Payments Interface (UPI) to transfer the funds to the specified account.
• Offline Payment:
• Cash Payment: Visit the designated bank or authorized agency and pay the amount in cash.
• Cheque/Demand Draft: Issue a cheque or demand draft in favor of the authorized agency and submit it at the designated bank or the Income Tax Department’s office.

1. Obtain Payment Acknowledgement:

• Online Payment: Upon successful payment, you will receive an online payment receipt or acknowledgement.
• Offline Payment: You will receive a payment receipt or acknowledgement from the bank or authorized agency.
  Important Considerations:
• Timely Payment: Ensure that you pay the demanded amount within the specified time frame to avoid penalties and interest charges.
• Keep Records: Maintain copies of the demand notice, payment receipts, and any other relevant documents for future reference.
• Consult a Tax Professional: If you have any doubts or complexities regarding the demand notice or payment process, consult with a tax professional for guidance.
  By following these steps and adhering to the guidelines provided in the demand notice, you can efficiently pay the demanded amount and comply with your tax obligations.