Section 411 Income Tax Act 2025: When Is Tax Demand Due and Default?

Section 411 governs payment of an income-tax demand, interest for delayed payment, extension or instalments, relief during appeal and the point at which an assessee is treated as in default.

What is the deadline to pay tax under Section 411(1)?

Ordinarily, an amount specified in a notice of demand under Section 289 must be paid within 30 days after service of that notice, at the place and to the person specified. This rule does not govern advance tax.

The Assessing Officer may specify a shorter period if allowing the full 30 days would be detrimental to revenue, but must first obtain the previous approval of the Joint Commissioner. Taxpayers should check both the date of service and the actual payment period stated in the notice.

What interest applies for delayed payment under Section 411(3)?

Where the demand remains unpaid beyond the applicable period, simple interest at 1% for every month or part of a month applies. The period runs from the day immediately following expiry of the payment deadline until the date of payment.

Under the Finance Act, 2026 amendment to Section 411(3), specified demands relating to penalty under Section 439 are excluded from interest for the periods described in Section 411(3)(b), including up to the relevant order under Section 359 or Section 363, as applicable. Section 411(4) also prevents interest for the same amount and period being charged again where Section 398(3) interest applies to tax in an intimation under Section 399.

Can the Assessing Officer extend time or allow instalments?

Yes. Under Section 411(5), the assessee may apply before the original due date for an extension or permission to pay by instalments. The Assessing Officer may grant relief subject to appropriate conditions. An application alone does not automatically suspend payment obligations.

Where a permitted instalment is missed, Section 411(11) treats the entire outstanding amount as in default and deems the remaining instalments due on the date of the missed instalment.

Does filing an appeal automatically stop recovery?

No. Under Section 411(2), a demand remains valid during appeal or other proceedings, subject to the statutory provisions concerning continuation and validation of recovery proceedings. Under Section 411(12), where an appeal under Section 356 or 357 has been presented, the Assessing Officer may, in discretion and subject to conditions, treat the assessee as not in default for the disputed amount while the appeal remains pending.

A taxpayer contesting a demand should seek the appropriate stay or non-default treatment rather than assuming that filing an appeal by itself stays collection.

Can interest be reduced or waived under Section 411(7)?

The Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner may reduce or waive interest under Section 411(3) on an assessee's application if satisfied of all three statutory conditions:

• Payment of interest has caused, or would cause, genuine hardship.
• The default arose from circumstances beyond the assessee's control.
• The assessee cooperated in assessment-related inquiries or recovery proceedings.

Under Section 411(8), an order must be passed within 12 months from the end of the month in which the application is received. Under Section 411(9), rejection in whole or part requires an opportunity of being heard.

When is an assessee deemed to be in default?

Section 411(10) deems an assessee in default when the demand is not paid within the time fixed under Section 411(1), or within an extension allowed under Section 411(5). This status may lead to additional consequences under Section 412 and recovery provisions, subject to available statutory relief.

Under Section 411(6), interest is adjusted if the relevant demand is reduced by an order specified in that subsection, and excess interest is refundable. If the demand is subsequently increased in the circumstances specified there, interest is recalculated under the provision.

What if foreign income cannot be remitted to India?

Section 411(13) protects an assessee from being treated as in default for the part of tax attributable to foreign income that cannot be remitted to India because the foreign country's laws prohibit or restrict remittance, for as long as that restriction continues. Section 411(14) treats income as brought into India where it has been or could have been used for expenditure actually incurred abroad, or is brought into India in any form.

Relevant statutory expressions

Practical illustrations

Example 1: Unpaid demand after the deadline

A taxpayer receives a valid demand for Rs. 1,00,000 with the normal 30-day payment period. If the amount remains unpaid after that period, Section 411(3) interest generally begins the following day at 1% per month or part thereof, subject to the statutory exceptions.

Example 2: Instalment request

A taxpayer cannot pay a demand in one payment. The taxpayer applies to the Assessing Officer before the due date for instalments. If instalments are approved, the conditions and deadlines in the order govern; missing one instalment can accelerate the entire outstanding balance under Section 411(11).

Example 3: Disputed demand in appeal

A taxpayer appeals a disputed assessment and asks the Assessing Officer to treat the disputed demand as not in default under Section 411(12). The requested relief is discretionary and is not automatically granted by filing the appeal.

Corresponding provision under the Income-tax Act, 1961

Section 411 broadly corresponds to Section 220 of the Income-tax Act, 1961. For earlier tax years and pending proceedings, the applicable legislation and transition provisions must be checked separately; the correspondence does not make every subsection identical.

Frequently asked questions

Is the normal payment period 30 days?

Yes. Section 411(1) ordinarily allows 30 days after service of the notice, but a shorter period may be specified with the required prior approval.

What is the late-payment interest rate?

Generally 1% simple interest per month or part of a month under Section 411(3), subject to statutory exceptions and adjustments.

Can I request instalments after the due date?

Section 411(5) contemplates an application before expiry of the payment deadline. Apply promptly and do not assume a late application provides protection.

Does an income-tax appeal automatically stay the demand?

No. Section 411(12) provides discretionary treatment as not in default for the disputed amount, subject to conditions.

Can interest be waived for hardship alone?

Not ordinarily. Section 411(7) requires genuine hardship, circumstances beyond the assessee's control and cooperation with the authorities.

Official statutory sources and related provisions

Last reviewed: 12 November 2026. This article provides general statutory information, not case-specific advice.