Income-tax demand notice: pay, disagree, rectify or appeal
A demand on the portal is not always a demand you owe. Many come from a TDS credit that was not matched, income counted twice, or a deduction dropped in processing. We check the working first, then respond, rectify or appeal, whichever the case needs. The first read is free and the fee is quoted before we start.
Fixed quote after a free first read of the demand
Ask an expert on WhatsApp, freeWhat an income-tax demand notice is
When tax, interest, penalty or any other sum is payable under an order, the Assessing Officer serves a notice of demand: section 156 of the Income-tax Act, 1961, and section 289 of the Income-tax Act, 2025 for tax year 2026-27 onwards. An intimation after processing your return that shows tax payable is itself treated as a notice of demand.
The amount must be paid within 30 days of service of the notice. The officer can set a shorter period in some cases. After that, simple interest runs at 1% for every month or part of a month until payment.
The demand shows on the e-filing portal under Pending Actions, Response to Outstanding Demand, where you either pay or say why you disagree.
What we do with a demand
The demand compared with your return, Form 26AS and AIS, line by line.
Agreement, or disagreement in full or in part with reasons, entered correctly.
A request to correct a mistake apparent from the record, such as a missed TDS credit.
The appeal drafted and filed within 30 days, with the grounds that matter.
An application for more time or instalments, made before the due date.
A fixed quote in writing after the free first read.
Documents required
Send us
- The demand notice, intimation or order
- The return and computation for that year
- Form 26AS and AIS for that year
- Challans for any tax already paid against it
Not sure which package fits?
A specialist will map your situation to the right plan in one call.
From demand to closure
- Free first read
We check the year, the section, the amount and the date it was served.
- Find the cause
The department's working compared with your return and tax credits.
- Choose the route
Pay, respond on the portal, rectify, appeal, or a combination.
- File in time
Response, rectification or appeal filed before the 30 days end.
- Follow through
Refund adjustments, further queries and hearings handled until the demand is settled.
Transparent pricing
First read
Free
before you reply or pay anything
- What the notice is and which law it is under
- The real last date to respond
- What it will take to answer it
- A fixed quote in writing
- Drafting or filing
Reply
Fixed quote
by the notice, after we read it
- Demand checked against your return, 26AS and AIS
- Response filed on the portal with reasons
- Rectification request where a mistake is apparent
- Follow-up until the response is processed
- Appeal
Appeal or stay
Fixed quote
where the matter goes further
- Appeal to the Commissioner (Appeals) drafted and filed
- Application for more time or instalments
- Hearings attended
- Penalty proceedings answered
There is no price list for notices, because no two are alike. The fee depends on the kind of notice, the number of years, the amount in dispute and how much reconciliation it needs. A simple reply to an income-tax intimation starts at ₹999 and a GST mismatch reply at ₹1,499; everything else is quoted in writing after the free first read, before any work starts. Professional fees exclude GST at 18%.
Your four options
| Option | When it fits | Time limit |
|---|---|---|
| Pay the demand | The demand is correct | Within 30 days of service, to avoid interest |
| Disagree on the portal | Tax was already paid, or the working is wrong | As early as possible; pay any part you accept |
| Rectification | A mistake apparent from the record, such as a TDS credit not given | Within 4 years from the end of the financial year of the order |
| Appeal | The dispute needs argument, not just a correction | 30 days from service of the notice of demand |
On the portal, “Demand is correct” cannot be undone: you cannot dispute that demand afterwards. A rectification request must be decided within six months from the end of the month in which it is received. An appeal filed late can be admitted for good reason. The appeal fee is ₹250, ₹500 or ₹1,000, depending on the assessed income.
What happens if the demand is not paid
Interest
Simple interest at 1% for every month or part of a month, from the day after the 30 days end to the day you pay.
Adjustment against refunds
An outstanding demand can be adjusted against a refund due to you for another year. This is the usual way people first notice an old demand.
Penalty
An assessee in default can be charged a penalty, which cannot exceed the tax in arrears. It is levied only after a hearing, and not where the default was for good and sufficient reasons.
Recovery
The Tax Recovery Officer can draw up a certificate and recover the arrears by attaching and selling movable or immovable property, or by appointing a receiver.
More time, or instalments
If you apply before the due date, the Assessing Officer can extend the time for payment or allow instalments, on conditions. A demand stays valid while an appeal is pending, so filing an appeal does not by itself stop recovery: ask for time as well.
Why demands are often wrong
- TDS or advance tax paid but not credited, because it does not match Form 26AS
- Income picked up from AIS that was already in the return, or is not yours
- A deduction or exemption dropped when the return was processed
- An old demand that was paid, or already adjusted against a refund
Related
Frequently asked questions
Within how many days must an income-tax demand be paid?
Within 30 days of service of the notice of demand. In some cases the officer can specify a shorter period.
What is the interest on an unpaid income-tax demand?
Simple interest at 1% for every month or part of a month, from the day after the period for payment ends until the day the amount is paid.
How do I respond to an outstanding demand on the income-tax portal?
Log in, open Pending Actions and then Response to Outstanding Demand. Choose Demand is correct and pay, or Disagree with demand, in full or in part, and give your reasons.
What if the income-tax demand is wrong?
Disagree on the portal with reasons. If the error is a mistake apparent from the record, file a rectification request. If the dispute needs argument, file an appeal within 30 days of service of the demand.
Can an income-tax demand be adjusted against my refund?
Yes. An outstanding demand can be adjusted against a refund due to you for another year.
Can I pay an income-tax demand in instalments?
The Assessing Officer can extend the time for payment or allow instalments if you apply before the due date.
Which section covers a demand notice under the new Income-tax Act?
Section 289 of the Income-tax Act, 2025, which replaces section 156 of the 1961 Act. The time to pay and the interest are in section 411.
Official references
The statutory sources behind this page. We keep our guidance aligned to them: verify anything time-sensitive directly.
- Income Tax DepartmentReturns, forms, rates and e-filing utilities
- TRACESTDS certificates and justification reports
- Ministry of Corporate AffairsCompanies Act filings, forms and fee schedules
Facts on this page are checked against these sources; the date of the last check is shown at the top of the page. It is general guidance, not advice on your specific facts. How we write and check our guides.