Notice
Section 220 Tax Recovery — When Tax Payable and Penalty for Default
Section 220 deals with when tax is payable after a demand notice under Section 156, the interest on delayed payment (1% per month under 220(2)), and penalties for default in payment.
Response Deadline
30 days from demand notice
Extension
Possible
New IT Act
Section 220
What Does This Notice Mean?
After receiving a demand notice, you have 30 days to pay. After that, you are deemed an "assessee in default" and recovery proceedings can begin — including bank attachment, salary garnishment, and property attachment.
Common Triggers
- Non-payment of demand within 30 days of Section 156 notice
- Partial payment without applying for installment
- Not applying for stay of demand while appeal is pending
How to Respond
- 1Pay the demand within 30 days to avoid recovery proceedings
- 2If unable to pay, apply for installment payment under Section 220(3)
- 3If filing appeal, apply for stay of demand (pay at least 20% of disputed amount)
- 4If demand is incorrect, file rectification under 154 or appeal immediately
Consequences of Non-Compliance
Interest at 1% per month under 220(2). The TRO can: attach bank accounts, garnish salary, attach and sell movable/immovable property, issue arrest warrant.
Frequently Asked Questions
What recovery actions can the department take?
After you are deemed an assessee in default: attachment of bank accounts, salary garnishment, attachment and sale of movable property, attachment and sale of immovable property, and arrest and detention.
Related Sections
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Disclaimer: This content is for informational purposes only and does not constitute legal or tax advice. Always consult a qualified Chartered Accountant or tax professional for advice specific to your situation. AI-generated content should be reviewed by a professional before use.