Section 411 of the Income-tax Act, 2025 sets out when tax demanded must be paid and when a taxpayer is treated as in default. While an appeal is pending, the Assessing Officer can treat you as not in default for the disputed amount, which in practice is a stay of demand. This replaces Section 220 of the 1961 Act, including Section 220(6).
Income Tax, Income-tax Act 2025, across India
Income-tax Act, 2025
This page is for notices and orders under the Income-tax Act, 2025. If yours names the Income-tax Act, 1961, see Stay of Demand (1961 Act). Not sure which Act applies? The heading of the notice names it, or call us.
Overview
Filing an appeal does not stop recovery by itself. Without a stay, the department can adjust refunds, attach bank accounts or take other recovery action. A stay application explains why recovery should wait until the appeal is decided.
When this applies
- High demand raised in an assessment under appeal
- Recovery action or refund adjustment proposed
- Financial hardship in paying a disputed demand
- Strong grounds on merits in the appeal
Time limit
Documents needed
- The demand notice and the order
- Proof of filing the appeal
- Grounds showing the merits of the appeal
- Evidence of financial hardship, where relied upon
How we handle it
- File the appeal and the stay application together
- Show prima facie merits, the balance of convenience and any hardship
- Follow up for a decision and respond to any condition proposed
- Approach higher authorities or the Tribunal if the stay is refused
Points to note
- Earlier CBDT instructions under the 1961 Act often expected a part payment of the disputed demand. Check the instruction in force
- Recovery cannot be pressed while a properly filed stay application is pending decision, as courts have held under the 1961 Act
- For demands under the 1961 Act, apply under Section 220(6)
What usually comes next
- First Appeal to the Commissioner (Appeals) under Section 357 of the Income-tax Act, 2025The appeal the stay depends on
- Appeal to the Income Tax Appellate Tribunal under Section 362 of the Income-tax Act, 2025Stay before the Tribunal
- Notice of Demand under Section 289 of the Income-tax Act, 2025The demand notice
Frequently asked questions
Does filing an appeal stop recovery?
No. A stay of demand has to be applied for separately.
Can the Tribunal grant a stay?
Yes. Section 363 allows the Tribunal to grant a stay for up to 180 days, extendable to a total of 365 days.
Official sources
- Income Tax e-Filing portalincometax.gov.inReply to notices under e-Proceedings and file first appeals
- Income Tax Appellate Tribunalitat.gov.inOrders, cause lists and bench information
- Income Tax Departmentincometaxindia.gov.inActs, rules, circulars and the 1961 to 2025 section utility
Received a notice or an order?
Call us to talk it through. Keep the notice and its response date handy.