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Demand Notice under section 156 of Income Tax Act, 1961

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Laxmi Navlani

Income Tax
IT Notice
Notice u/s 156

The assessee may receive a demand notice under section 156 specifying the amount payable if the assessing officer raises any demand for tax, interest, penalty, fine, or any other sum as per the provision of Income Tax Act, 1961.

Notice for sum payable u/s 143(1), 200A (1), 206CB (1), etc shall be deemed to be Demand Notice u/s 156.

Assessee has to pay the amount specified in the notice within 30 days of receipt of the notice.

Response to Demand Notice under section 156 of Income Tax Act

For submitting the response there are four options available with a taxpayer as below:

Lets discuss all the four options in detail.

Option 1: Demand is correct

If assessees agrees with the demand he/she should select this option that “Demand is correct”. Once the assessee selects this option then he cannot disagree with the demand.

If a refund is due, the outstanding amount and the interest will be adjusted against the refund due. Otherwise, the assessee has to pay the demand immediately.

Option 2: Demand is partially correct

If the assessee agrees with the partial demand he/she should select this option that “Demand is partially correct”. Once the assessee selects this option he/she will have to enter the amount of demand to which he/she agrees.

Moreover, the assessee has to provide the reasons for disagreement to the remaining amount of demand.

Following are the reasons which assessee can select for the disagreement and provide the additional information for the same.

Option 3: Disagree with demand

If the assessee disagrees with the demand he/she should select this option that “Disagree with demand”. Once assessee selects this option he/she will have to select reason for disagreement which are same as reasons discussed above.

Option 4: Demand is not correct but agree for adjustment

If the assessee agrees for the adjustment of demand he/she should select this option. Once the assessee selects this option below screen will appear and he/she will have to select the reason for disagreement which are the same as the reasons discussed above.

adjustment of demand

How to respond to outstanding demand notice

  1. Login to Income Tax Portal

    Login in to your income tax e-filing portal account with your user id and password.LOGIN TO ITD

  2. Go to Response to Outstanding Tax Demand

    Select the option of E-file -> Response to Outstanding Tax DemandRespond to Outstanding Demand Notice under section 245

  3. Submit Response

    Click on submit response
    submit_response

  4. Select response and submit

    After submit, select one of the suitable options out of the four options available. After selecting the appropriate option submit the additional details accordingly.
    Responses to notice under section 245

Time limit to respond

As per Section 220, amount shall be paid within a period of thirty days from the date of service of notice. However, in some exception cases, time period of thirty days may be reduced by the assessing officer with prior approval of joint commissioner.

An assessee can also make an application to the AO to extend the time for payment or allow payment by installment, provided application should be made before expiry of thirty days.

Consequences of delay

FAQs

What will happen if I disagree with a tax demand notice?

If the assessee disagrees with the tax demand notice then he can challenge the same to the next higher authority.

Where can I find my demand notice online?

You can log in to the Income Tax Site and then select the option “Respond to Outstanding Tax Demand” in the e-File tab, and you can check the tax demand notice.

What is the meaning of assessee in default?

If the assessee does not pay the amount specified in the demand notice within 30 days of service of notice then the assessee becomes assessee in default.

Got Questions? Ask Away!

  1. Hi @emmy

    You can follow the steps given to submit a response to the IT Department

    • Firstly, login to the income tax efiling portal using your ID and password
    • Click on e-File > Response to Outstanding Demand
    • Click on the Option to “Submit” if you wish to respond to this notice.
    • Clicking on submit would take you to a different screen where you will be asked to choose from one of the 4 options as shown below.
    1. Demand is correct
    2. Demand is partially correct
    3. Disagree with Demand
    4. Demand is not correct but agree for adjustment
    • Select the applicable option and submit

    Hope this helps!

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