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Notice of Demand u/s 156 of Income Tax Act

Last Update Date : April 27, 2019
Estimated Read Time: 2 min

For every step taken by the government there is a corresponding law/rule that supports it.  When the income tax department sends you a notice under certain sections, then it is most likely you have broken a rule.  If you receive a demand notice u/s 156, then you will need to respond to notice 156  and pay the outstanding amount stated by the due date.

Section 156 of Income Tax Act

What is Notice of Demand under section 156?

If you had received a prior notice and the notice results  in an amount payable by you, either in the form of tax, interest, penalty or fine, then a notice u/s 156 will be issued for the outstanding tax amount.

[ Read: Tax Notices under Income Tax Act 1961 ]

How H&R Block can help you?

Receiving a scrutiny notice is never a pleasant experience and failure to respond to it correctly can result in further proceedings or penalties.  To ensure any notices you receive are handled with care and attention to detail, consult your personal tax experts at H&R Block India to get instant tax notice assistance.

How To Respond To Notice u/s 156

Upon receiving the demand notice for outstanding tax payable, the taxpayer must:

  • deposit the amount stated within 30 days.
  • in special cases, with the approval of the Joint Commissioner of Income Tax, you may have less than 30 days to respond.

Consequences of Not Responding to Notice u/s 156

If you fail to respond to the notice received u/s 156, then you will either have to pay:

  • Interest u/s 220 – rate of 1% per month from the expiry of 30 days till payment is received.
  • Penalty u/s 221 – the AO can impose a penalty, equal to the outstanding demand.
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CA Madhuri Marne
Madhuri is a tax expert at H&R Block (India) with over a decade of professional experience. Having co-authored a book on economics for the ICAI exam, she now enjoys writing about tax-related topics in a simple and easy manner. Outside of work, Madhuri is passionate about teaching students who are appearing for professional exams.

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