Notice of Demand

A Notice of Demand, issued under Section 156 of the Income-tax Act, is a formal communication from the tax department informing a taxpayer that an amount is still payable after an assessment, reassessment, rectification, or appeal order. The notice specifies the sum due, the relevant assessment year, and the timeline within which the payment must be made.

Typically, the taxpayer is allowed a period of 30 days to settle the amount. Failure to do so can lead to additional interest, penalties, and, in more serious instances, recovery proceedings initiated by the department.

Example:

If, after examining your tax return, the department concludes that an additional ₹12,000 is payable, it will issue a Notice of Demand instructing you to pay that amount within the prescribed 30-day window.