Filing an appeal does not automatically stop recovery of the demand. A stay application must be made to the Assessing Officer, and if needed to the Principal Commissioner. As per CBDT guidelines, demand is ordinarily stayed on payment of 20% of the disputed demand, though a lower payment can be sought in suitable cases.
Income Tax, across India (faceless)
Income-tax Act, 1961
This page is for notices and orders under the Income-tax Act, 1961. If yours names the Income-tax Act, 2025, see Stay of demand u/s 411 (2025 Act). Not sure which Act applies? The heading of the notice names it, or call us.
Overview
A well-reasoned stay application showing a prima facie case, financial hardship or high-pitched assessment can secure a stay on lower or no payment.
When this applies
- High demand from assessment pending in appeal
- Recovery notices, bank attachment or refund adjustment
Time limit
Documents needed
- Assessment order, demand notice and appeal acknowledgement
- Financial statements showing hardship, if claimed
How we handle it
- File the stay application with the Assessing Officer
- Escalate to the PCIT where needed
- Request an early hearing of the appeal
- Approach the Tribunal for stay in deserving cases
Points to note
- Bank attachments can be lifted on a proper stay application
- Track the stay period and conditions
What usually comes next
- Appeal before Commissioner of Income Tax (Appeals)The appeal the stay depends on
- Appeal before Income Tax Appellate Tribunal (ITAT)Stay before the Tribunal
- Demand Notice u/s 156 / Refund AdjustmentRefund adjustment against demands
Frequently asked questions
Is 20% payment compulsory for stay?
It is the standard under CBDT guidelines, but authorities may accept a lower amount in appropriate cases, such as high-pitched assessments or covered issues.
Official sources
- Income Tax e-Filing portalincometax.gov.inReply to notices under e-Proceedings and file first appeals
- Authenticate a notice (DIN check)incometax.gov.inConfirm that a notice or order is genuine before replying
- 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.