Explanation
Section 156 requires the Assessing Officer to serve a notice of demand on the taxpayer whenever tax, interest, penalty, fine, or any other sum is determined to be payable. The notice is issued in Form 7 through the income-tax portal. The taxpayer must pay the entire demand within 30 days of the service of the notice. If the demand is not paid within this period, interest under §220(2) begins accruing at 1% per month (or part of a month) from the 31st day until the date of payment. The taxpayer can apply to the AO under §220(3) for an extension of the payment period if there is genuine difficulty — the AO has discretion to grant an extension or instalment facility. Where an appeal is filed against the demand, the taxpayer can apply to the Principal Commissioner of Income Tax (PCIT) or Commissioner for a stay of demand under §220(6) — typically 20% of the demand must be deposited to get a full stay. The AO can also reduce or waive interest under §220(2A) in cases of genuine hardship. Taxpayers must monitor their 'Pending Actions' tab on the e-filing portal regularly to avoid missing demand notices. Verify on the income-tax portal before filing.