Section 156 tax notice is the notice of demand given by the Income Tax Department when any tax, penalty, interest, fine, or any other sum is payable in the outcome of any request passed. Section 156 tax notice of demand will determine the payable sum.

This demand notice is commonly joined by an intimation notice under section 143(1) or alongside with the appraisal order that is given on completion of the scrutiny procedures. Notice of Demand u/s 156 is given regarding each evaluation request for an addition to income.

Time Limit

The sum which is requested in the Section 156 demand notice must be paid by the Assessed within 30 days after the date of receipt of the notification.

Specimen of the Section 156 Tax Notice

section 156 tax notice

Steps to be taken

In the case that you have gotten a Section 156 tax notice for demand then you have to follow these steps:

1. log in to the Income Tax e-filing portal with your User ID and Password.
2. Click on the option of “E-file” and then choose the option of “Respond to Outstanding Tax Demand“. You will get the following window:
section 156 tax notice
3. Click on “Submit” to submit the response and then you will get the following options:
section 156 tax notice
4. In the case, that the demanded amount is correct, then you have to choose the option of “Demand is correct“. Once the option is selected then you need to pay the tax online through the option of E-Pay Tax and in case, any amount of refund is due, then the amount of demand will be adjusted with it and you need to pay the balance amount.

5. If the demanded amount is partially correct, then you have to select the option of “Demand is partially correct“. At that point there will be two options available:

  • Correct amount
  • Incorrect amount

section 156 tax notice

  • Enter the amount which is correct and the incorrect amount will be auto-populated and you likewise need to give a valid reason because of which the demanded amount is incorrect. In this case, the acknowledgment is subject to approval by the Department.

6. If the demanded amount is incorrect, then you have to choose the option of “Disagree with demand“. You need to select the purpose due to which the demanded amount is incorrect. After submitting a reason the success screen would be displayed with the transaction ID. The status of demand will be updated after the response is processed by the IT Department.

Penalty

If the individual to whom the section 156 tax notice for demand has been given neglects to pay the sum requested within the time limit given under the section 156 tax notices, at that point the assessee is subject to the following penalties:

  • Penalty u/s 221- A penalty u/s 221might be appointed by the AO on the assessed but it should not be more than the amount demanded in the Demand Notice.
  • Interest u/s 220- Interest at the rate of1% per month or part thereof is payable after the expiry of the 30 days provided under section 156 tax notice.

For any assistance on ITR Filing don’t hesitate to counsel the tax experts at LegalRaahi. You can file ITR yourself by our Free ITR software or get CA’s assistance on filing an Income tax return. You can likewise utilize the choice of Bulk Return, Business Return, or Revised Return Filing.