When an order results in tax, interest, penalty or any other sum being payable, a notice of demand is issued under Section 289 of the Income-tax Act, 2025. It replaces Section 156 of the 1961 Act. When and how the amount must be paid, and when you are treated as in default, is covered by Section 411 (earlier Section 220).
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 Demand Notice u/s 156 / Refund Adjustment (1961 Act). Not sure which Act applies? The heading of the notice names it, or call us.
What this notice means
A demand notice follows an intimation, assessment, penalty or other order. It is often the first time a taxpayer notices a problem. Before paying or disputing, confirm that the demand is genuine and correctly computed, and decide whether the order behind it should be rectified or appealed.
Common reasons it is issued
- Additions made in an assessment or reassessment order
- Adjustments made while processing the return
- Penalty or interest orders
- Mismatch in tax credit or challan details
Time limit to respond
Documents to keep ready
- The demand notice and the order behind it
- Challans and TDS certificates for the year
- Earlier rectification or appeal papers, if any
How we handle it
- Check the demand on the portal and match it with the order
- Identify whether the demand arises from a mistake, a disputed issue, or both
- File rectification under Section 287 for mistakes, or an appeal under Section 357 for disputed issues
- Apply for stay of demand under Section 411 while the appeal is pending
- Respond to any proposal to adjust refunds against the demand
Points to note
- Respond on the portal to say whether you agree with the demand
- An appeal does not stop recovery by itself. A stay has to be applied for
- For orders under the 1961 Act, the demand notice cites Section 156
What usually comes next
- Stay of Income Tax Demand under Section 411 of the Income-tax Act, 2025Stopping recovery during the appeal
- Rectification of Mistake under Section 287 of the Income-tax Act, 2025Correcting a demand raised in error
- First Appeal to the Commissioner (Appeals) under Section 357 of the Income-tax Act, 2025Appealing the order behind the demand
Frequently asked questions
Can the department adjust my refund against this demand?
Yes, after giving notice. You can object, especially if the demand is disputed in appeal or stayed.
Is Section 289 different from Section 156?
The substance is the same. Section 289 is the corresponding provision of the 2025 Act.
Official sources
- Authenticate a notice (DIN check)incometax.gov.inConfirm that a notice or order is genuine before replying
- Income Tax e-Filing portalincometax.gov.inReply to notices under e-Proceedings and file first appeals
- 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.