Section 358 of the Income-tax Act, 2025 requires a first appeal to be filed within thirty days of the notice of demand or the order, with a fee of ₹250 to ₹1,000 by income slab, and bars admission unless tax on the returned income has been paid.
What section 358 does
Section 358 governs how a first appeal is filed — the successor to section 249 of the Income-tax Act, 1961. It carries three things that decide whether an appeal even gets off the ground: the fee, the time limit, and the pre-deposit condition.
The fee is modest and slab-based: ₹250 where the assessed total income is ₹1,00,000 or less, ₹500 where it is above ₹1,00,000 but not above ₹2,00,000, ₹1,000 where it exceeds ₹2,00,000, and ₹250 where the subject matter is not covered by those clauses.
The limitation is thirty days — from the date of service of the notice of demand where the appeal relates to an assessment or penalty, and otherwise from the date the order is served. Delay can be condoned under sub-section (5) for sufficient cause.
The Income-tax Act, 2025 takes effect from 1 April 2026 and applies from tax year 2026-27. The Income-tax Act, 1961 continues to govern every year up to 31 March 2026, including assessments, appeals and penalties for those years, because of the repeal and savings provision in section 536. Figures quoted here are the amounts written into the Act as enacted (with the Gazette corrigenda of 3 September 2025); the annual Finance Act can change rates and thresholds.
Old Act and new Act, side by side
The table below shows what the Income-tax Act, 1961 did and where the same ground is covered in the Income-tax Act, 2025.
| Income-tax Act, 1961 | What it did | Income-tax Act, 2025 |
|---|---|---|
| 249(1) | Form and verification of appeal | 358(1) |
| 249(1), proviso | Appeal fee by income slab | 358(2) |
| 249(2) | Thirty-day limitation | 358(3) |
| 249(2), proviso | Exclusion of time during a section 270AA application | 358(4) |
| 249(3) | Condonation for sufficient cause | 358(5) |
| 249(4) | Tax on returned income to be paid before admission | 358(6) and 358(7) |
| 246A | Appealable orders | 357 |
Section 358 sub-section by sub-section
Read this alongside the bare text — each heading below is a sub-section of the section as enacted.
Sub-sections (1) and (2) — form and fee
Every appeal must be in the prescribed form, verified in the prescribed manner. An appeal to the Commissioner (Appeals) or Joint Commissioner (Appeals) must carry a fee of ₹250 (total income as computed by the Assessing Officer up to ₹1,00,000), ₹500 (above ₹1,00,000 up to ₹2,00,000), ₹1,000 (above ₹2,00,000), or ₹250 where the subject matter is not covered by those clauses.
Sub-section (3) — when the thirty days start
The appeal must be presented within thirty days — (a) from the date of service of the notice of demand where the appeal relates to an assessment or penalty; or (b) in any other case, from the date on which intimation of the order appealed against is served. Identifying which limb applies decides the start date.
Sub-section (4) — time excluded during an immunity application
Where an application under section 440(1) — immunity from penalty — is rejected, the period from the date the application was made to the date the rejection order is served is excluded in computing the thirty days. A taxpayer who pursues immunity and fails is not penalised on limitation.
Sub-section (5) — condonation of delay
The Joint Commissioner (Appeals) or Commissioner (Appeals) may admit an appeal after the expiry of the period if satisfied that the appellant had sufficient cause for not presenting it in time. This is a discretion, so the reasons should be documented and supported.
Sub-sections (6) and (7) — the pre-deposit condition
No appeal shall be admitted unless, at the time of filing: (a) where a return has been filed, the assessee has paid the tax due on the income returned; or (b) where no return has been filed, the assessee has paid an amount equal to the advance tax which was payable. Sub-section (7) allows the appellate authority, on application and for reasons to be recorded in writing, to exempt the appellant from clause (6)(b).
What to do before filing
Three steps: pay the tax on returned income (or advance tax equivalent), compute the thirty days from the correct trigger, and pay the fee for the right slab. An appeal that fails the pre-deposit test is not admitted at all, whatever its merits.
Worked example
An assessment order and notice of demand are served on 12 August 2028 for tax year 2026-27.
| Item | Position | Effect |
|---|---|---|
| Limitation | Thirty days from 12 August 2028 | Appeal due by 11 September 2028 — sub-section (3)(a) |
| Assessed total income ₹34,00,000 | Above ₹2,00,000 | Fee of ₹1,000 — sub-section (2)(c) |
| Tax on returned income ₹4,20,000, unpaid | Sub-section (6)(a) not satisfied | Appeal not admitted until paid |
| An immunity application under section 440(1) was filed on 20 August and rejected on 30 September | Period 20 August to service of the rejection excluded | Limitation effectively extended — sub-section (4) |
The third row is where appeals are most often lost. The disputed addition may be large, but the tax on the returned income — the amount the assessee itself declared — must be paid before the appeal is admitted. The disputed portion is a separate question, dealt with through a stay application.
Compliance checklist and due dates
- Pay the tax on returned income before filing; sub-section (6)(a) is a condition of admission.
- Where no return was filed, pay an amount equal to the advance tax payable, or apply under sub-section (7) for exemption.
- Compute thirty days from the notice of demand for assessment and penalty appeals, and from service of the order otherwise.
- Pay the correct fee: ₹250, ₹500 or ₹1,000 by slab, or ₹250 where the subject matter is not covered.
- If an immunity application under section 440 was made and rejected, claim the exclusion of time under sub-section (4).
- Where late, file a documented condonation request under sub-section (5) with the appeal, not afterwards.
- Appeal against a section 270 assessment lies to the Commissioner (Appeals) under section 357.
Common mistakes
- Filing without paying tax on the returned income and finding the appeal is not admitted.
- Counting thirty days from the date of the order rather than from service of the notice of demand.
- Paying the wrong fee slab, which can delay registration of the appeal.
- Forgetting the exclusion of time available where a section 440 immunity application was rejected.
- Assuming delay will be condoned as a matter of course; sub-section (5) requires sufficient cause.
This is an explanatory guide, not tax advice, and it does not reproduce the section in full. Read the bare text of the section before you rely on it, and check for later amendments, the Income-tax Rules made under the new Act, and CBDT circulars and notifications.