What will happen if I don’t Pay Income tax Demand ?
Consequences for non-payment of tax demand?
- Non payment of tax demand attracts
- penalty and
- prosecution as per the provisions of the Income tax Act,1961 and
- Proceedings for recovery listed in Chapter XVII-D of the Income tax Act, 1961.
- You are also liable to pay simple interest at the rate of 1% for every month or part of a month for the period of default in accordance with section 220(2) of Income Tax Act, 1961 (When tax payable and when assessee deemed in default.) .
Section 220 of Income Tax Act (1) Any amount, otherwise than by way of advance tax, specified as payable in a notice of demand under section 156 shall be paid within 30 days of the service of the notice at the place and to the person mentioned in the notice
2) If the amount specified in any notice of demand under section 156 is not paid within the period limited under sub-section (1), the assessee shall be liable to pay simple interest at one per cent for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in sub-section (1) and ending with the day on which the amount is paid :