{"id":8352,"date":"2025-12-19T09:00:47","date_gmt":"2025-12-19T09:00:47","guid":{"rendered":"https:\/\/margbooks.com\/blogs\/?p=8352"},"modified":"2025-12-19T09:14:35","modified_gmt":"2025-12-19T09:14:35","slug":"section-156-of-income-tax-act","status":"publish","type":"post","link":"https:\/\/margbooks.com\/blogs\/section-156-of-income-tax-act\/","title":{"rendered":"When is a Notice Issued Under Section 156 of Income Tax Act?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_69_1 ez-toc-wrap-left counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #1c6e70;color:#1c6e70\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #1c6e70;color:#1c6e70\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/margbooks.com\/blogs\/section-156-of-income-tax-act\/#Understanding_Section_156_of_Income_Tax_Act\" title=\"Understanding Section 156 of Income Tax Act\">Understanding Section 156 of Income Tax Act<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/margbooks.com\/blogs\/section-156-of-income-tax-act\/#What_the_Notice_Means\" title=\"What the Notice Means?\">What the Notice Means?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/margbooks.com\/blogs\/section-156-of-income-tax-act\/#Circumstances_Triggering_a_Section_156_Notice\" title=\"Circumstances Triggering a Section 156 Notice\">Circumstances Triggering a Section 156 Notice<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/margbooks.com\/blogs\/section-156-of-income-tax-act\/#Types_of_Demands_Covered\" title=\"Types of Demands Covered\">Types of Demands Covered<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/margbooks.com\/blogs\/section-156-of-income-tax-act\/#Time_Limits_for_Payment\" title=\"Time Limits for Payment\">Time Limits for Payment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/margbooks.com\/blogs\/section-156-of-income-tax-act\/#Consequences_of_Non-Payment\" title=\"Consequences of Non-Payment\">Consequences of Non-Payment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/margbooks.com\/blogs\/section-156-of-income-tax-act\/#Remedies_Available_to_Taxpayers\" title=\"Remedies Available to Taxpayers\">Remedies Available to Taxpayers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/margbooks.com\/blogs\/section-156-of-income-tax-act\/#Practical_Tips_for_Businesses\" title=\"Practical Tips for Businesses\">Practical Tips for Businesses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/margbooks.com\/blogs\/section-156-of-income-tax-act\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n\n<p>A notice under section 156 of income tax act is an official notice sent by the Income Tax Department, demanding payment of tax, interest, penalty, or an amount due following tax assessment. This notice is not any mere formality, carries a legal weight and needs to be taken care of by the taxpayers at the earliest.&nbsp;<\/p>\n\n\n\n<p>Indian SME&#8217;s, salaried professionals, traders and manufacturers also get such notices when they have a tax liability which was not paid in time. Using digital solutions such as MargBooks software can aid in keeping accurate record keeping and to catch discrepancies early, so the likelihood of this being receiving notice is reduced.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Understanding_Section_156_of_Income_Tax_Act\"><\/span>Understanding Section 156 of Income Tax Act<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_the_Notice_Means\"><\/span>What the Notice Means?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>When the tax department has finally calculated your tax liability and demands payment, you will find a notice under section 156 of Income Tax Act. It is issued after:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Regular assessment (through Section 143 or 147)<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Reassessment on discrepancy<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Penalties or interest to be charged for late compliance<\/li>\n<\/ul>\n\n\n\n<p>This notice constitutes a formal demand of payment whereby the Department obtains a professional documentation both for the taxpayer and for the department itself.<\/p>\n\n\n\n<div class=\"btn-div\">\n\n    <a href=\"https:\/\/me9.in\/MBB\" class=\"marg-btn\" target=\"_blank\" rel=\"noopener\">Get Online Accounting Software<\/a>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Circumstances_Triggering_a_Section_156_Notice\"><\/span>Circumstances Triggering a Section 156 Notice<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Taxpayers can receive notice under Section 156 of Income Tax Act in various situations as follows:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Assessment completion: Once the tax officer is finished with the regular or reassessment, and computes the tax payable under Section 156 of income tax act.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Discrepancies in Returns: Errors, omissions or mismatch in the claims of TDS assessment may lead to reassessment and issuing of notifications.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Non-Payment of Advance Tax: In case of non-Payment advance tax arises.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Penalty or Interest: There are chances of high interest or penalty over the late filing or underreporting of income.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Refund Adjustments: If a refund is less than what is expected because outstanding tax adjustments on refunds may follow.<\/li>\n<\/ul>\n\n\n\n<p>For example, a small manufacturer based in Pune who fails to report certain sales in their returns could get this notice showing how much additional tax is owed.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types_of_Demands_Covered\"><\/span>Types of Demands Covered<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The notice involved under Section 156 of Income Tax Act can cover up different amounts:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Tax Arrears: Deficit on regular or advance payment of tax.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Interest on Delayed Payments: Section 234A, 234B, or 234C Interest charges.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Penalties: For under reporting of income , or Non-filing of Returns.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Other Dues: Any sum recoverable by act, including previous year adjustments.<\/li>\n<\/ul>\n\n\n\n<p>For Indian SMEs using <a href=\"https:\/\/margbooks.com\/online-accounting-software.html\">accounting software<\/a>, automated reconciliation is to ensure that these amounts are tracked and there are no surprises.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Time_Limits_for_Payment\"><\/span>Time Limits for Payment<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The notice includes the time period of payment which typically goes from 30 to 60 days. Key points include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Payment has to be made within the stipulated period.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Delays result in interest and garnish more penalties.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Partial payment is allowed, but must be accompanied with written communication.<\/li>\n<\/ul>\n\n\n\n<p>Salaried professionals residing in Bangalore have realized that combining accounting software with tax calculation modules helps in never missing any deadline.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2025\/12\/income-tax-156-1024x576.jpg\" alt=\"section 156 of income tax act \" class=\"wp-image-8356\" title=\"\" srcset=\"https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2025\/12\/income-tax-156-1024x576.jpg 1024w, https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2025\/12\/income-tax-156-300x169.jpg 300w, https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2025\/12\/income-tax-156-768x432.jpg 768w, https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2025\/12\/income-tax-156-150x84.jpg 150w, https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2025\/12\/income-tax-156.jpg 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Consequences_of_Non-Payment\"><\/span>Consequences of Non-Payment<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Neglecting the notice of a notice under Section 156 of Income Tax Act can give rise to severe consequences:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Legal Recovery Actions: Attachment of bank accounts, property or wages.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Interest Accrual: Unpaid tax attracts interest daily.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Penalty Escalation: The non-compliance actions trigger additional penalties.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Prosecution in Severe Cases: Willful evasion or repeated default.<\/li>\n<\/ul>\n\n\n\n<p>A Delhi-based trader ignored a Section 156 notification for two months paid the price for not responding to it immediately by getting their business account attached.<\/p>\n\n\n\n<div class=\"btn-div\">\n\n    <a href=\"https:\/\/me9.in\/MBB\" class=\"marg-btn\" target=\"_blank\" rel=\"noopener\">Get Cloud-Based GST Billing Software<\/a>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Remedies_Available_to_Taxpayers\"><\/span>Remedies Available to Taxpayers<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Taxpayers are given possibilities to counter or to control the notice:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Payment with Objection: Pay under protest and file an appeal.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Rectification Request: Rectify any errors in the assessment order by Section 154.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Appeal to CIT(A): Involve the filing of a formal appeal against the disputed demands concerning tax<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Installment Scheme: Ask for payment in instalments in case is not able to pay the full amount.<\/li>\n<\/ul>\n\n\n\n<p>For SME that uses <a href=\"https:\/\/margbooks.com\/gst-billing-software.html\">GST billing software<\/a>, creating differentiated invoices and reconciliation report helps to build a strong case for rectification or appeal.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Practical_Tips_for_Businesses\"><\/span>Practical Tips for Businesses<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Maintain correct record outdated with the help of our software.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Reconcile bank statements and invoices regularly to avoid discrepancies.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>React quickly to any communication from the tax department.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Consult professionals before you make payments in protest or file appeals.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Document all the payments and correspondence for future reference.<\/li>\n<\/ul>\n\n\n\n<p>Manufacturers in Gujarat have succeeded in preventing such long drawn out disputes by combining manual checks with the digital audit trail in our MargBooks software.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Notice issued by the commissioner section 156 of income tax act is a prime example warning to the Taxpayers that they are liable to pay tax amount, interest incurred, or penalty incurred on the unpaid tax under Section 156 of income tax act. Timely response is critical to SMEs, traders, professionals and salaried individuals to avoid legal consequences.&nbsp;<\/p>\n\n\n\n<p>Using tools such as <a href=\"https:\/\/margbooks.com\/\">MargBooks software<\/a> ensures the correct reporting, smoother reconciliation ease, and viability of compliance. Understanding types of demands, timelines for payment and remedies available helps Indian businesses to manage their tax liabilities on a sure footing. Problems can be avoided by being proactive and ensuring that matters don&#8217;t get out of hand, keeping up with financial stability while remaining fully compliant with the law.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A notice under section 156 of income tax act is an official notice sent by the Income Tax Department, demanding payment of tax, interest, penalty, or an amount due following tax assessment. This notice is not any mere formality, carries a legal weight and needs to be taken care of by the taxpayers at the [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":8353,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[1948],"tags":[57,86,2094],"class_list":["post-8352","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-income-tax","tag-cloud-based-accounting-software","tag-gst-billing-software","tag-income-tax"],"blocksy_meta":[],"blog_post_layout_featured_media_urls":{"thumbnail":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2025\/12\/Tax-2-150x150.png",150,150,true],"full":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2025\/12\/Tax-2.png",1200,576,false]},"categories_names":{"1948":{"name":"Income Tax","link":"https:\/\/margbooks.com\/blogs\/category\/income-tax\/"}},"tags_names":{"57":{"name":"cloud based accounting software","link":"https:\/\/margbooks.com\/blogs\/tag\/cloud-based-accounting-software\/"},"86":{"name":"gst billing software","link":"https:\/\/margbooks.com\/blogs\/tag\/gst-billing-software\/"},"2094":{"name":"Income Tax","link":"https:\/\/margbooks.com\/blogs\/tag\/income-tax\/"}},"comments_number":"0","wpmagazine_modules_lite_featured_media_urls":{"thumbnail":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2025\/12\/Tax-2-150x150.png",150,150,true],"cvmm-medium":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2025\/12\/Tax-2-300x300.png",300,300,true],"cvmm-medium-plus":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2025\/12\/Tax-2-305x207.png",305,207,true],"cvmm-portrait":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2025\/12\/Tax-2-400x576.png",400,576,true],"cvmm-medium-square":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2025\/12\/Tax-2-600x576.png",600,576,true],"cvmm-large":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2025\/12\/Tax-2-1024x576.png",1024,576,true],"cvmm-small":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2025\/12\/Tax-2-130x95.png",130,95,true],"full":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2025\/12\/Tax-2.png",1200,576,false]},"_links":{"self":[{"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/posts\/8352","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/comments?post=8352"}],"version-history":[{"count":2,"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/posts\/8352\/revisions"}],"predecessor-version":[{"id":8357,"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/posts\/8352\/revisions\/8357"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/media\/8353"}],"wp:attachment":[{"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/media?parent=8352"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/categories?post=8352"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/tags?post=8352"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}