Section 411 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 411 answers three questions about a tax demand: how long the assessee has to pay after a notice of demand, what interest runs if he does not, and when he becomes an assessee in default. It also provides for payment by instalments, for treating the assessee as not in default while an appeal is pending, and for relief where income is blocked abroad. This article follows the text as per the Income-tax Act, 2025 as amended by the Finance Act, 2026. If you have received a demand and are weighing your options, our legal dispute resolution team can help.
An amount in a notice of demand under section 289 (other than advance tax) is payable within thirty days of service, or a shorter period set with the Joint Commissioner's approval. If it is not paid, simple interest at 1% for every month or part of a month runs. Failing to pay in time makes the assessee deemed in default, unless the time has been extended or the Assessing Officer treats him as not in default while an appeal is pending. Sub-section (3) was substituted by the Finance Act, 2026.
Section 411(1): thirty days to pay
Any amount, "otherwise than by way of advance tax", specified as payable in a notice of demand under section 289, at the place and to the person mentioned in the notice, must be paid within:
- thirty days of the service of the notice; or
- a shorter period specified in the notice, with the previous approval of the Joint Commissioner, where the Assessing Officer has reason to believe that allowing the full thirty days would be detrimental to revenue.
Advance tax has its own timetable in Part C; see our article on sections 407, 409 and 410. The notice of demand is covered in our post on section 289.
Section 411(2): demand stays valid during an appeal
Where a notice of demand has been served and an appeal or other proceeding is filed or initiated in respect of the amount, the demand is deemed valid till the disposal of the appeal by the last appellate authority or disposal of the proceedings, and the notice has the effect specified in section 3 of the Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964 (11 of 1964). Check that Act for what it provides; it is not explained here.
Section 411(3) and (4): interest on unpaid demand
Sub-section (3) was substituted by the Finance Act, 2026, with effect from 1 April 2026. As it now stands:
| Clause | Rule |
|---|---|
| (3)(a) | If the amount in a notice of demand under section 289 is not paid within the period in sub-section (1), the assessee is liable to pay simple interest at 1% for every month or part of a month comprised in the period. The period starts the day immediately after the end of the period in sub-section (1) and ends with the day the amount is paid |
| (3)(b) | No interest is charged under this sub-section on a demand raised on account of penalty levied under section 439 (i) up to the date of passing of the order under section 359; (ii) up to the date of passing of the order under section 363, where the assessment or reassessment was made in pursuance of directions issued by the Dispute Resolution Panel under section 275 |
Sub-section (4): no interest is charged under sub-section (3) on any amount for any period where interest is charged on the same amount for the same period under section 398(3), on the tax specified in the intimation under section 399. This avoids charging interest twice on tax deducted but not paid; see our post on section 398 and the article on processing under section 399. For the penalty referred to in clause (3)(b), see our post on the under-reporting penalty.
Example (amounts assumed). A notice of demand for Rs. 2,00,000 is served on 10 June and the thirty days end on 10 July. The assessee pays on 25 September. The period for interest runs from 11 July to 25 September, which falls in three months or part of a month (11 July to 10 August, 11 August to 10 September, 11 September to 25 September). Interest = 1% x Rs. 2,00,000 x 3 = Rs. 6,000.
Section 411(5): more time or instalments
Nothing in sub-section (3) prevents the Assessing Officer, where an application is made by the assessee before the expiry of the due date under sub-section (1), from extending the time for payment or allowing payment by instalments, subject to such conditions as he thinks fit. The application must be made before the due date runs out.
Section 411(6): interest follows a revised demand
Where, as a result of an order under section 287, 288, 359, 363, 365(10), 368 or 378, or an order of the Settlement Commission under section 245D(4) of the Income-tax Act, 1961 (43 of 1961) (a reference printed in the section):
| Clause | Result |
|---|---|
| (a) | If the amount on which interest was payable under sub-section (3) is reduced, the interest is reduced accordingly and excess interest paid is refunded |
| (b) | If, after such reduction, the amount on which interest was payable is increased as a result of an order under those sections or section 377, the assessee is liable to pay interest under sub-section (3) (i) from the day immediately after the end of the period in the first notice of demand referred to in sub-section (1), and (ii) ending with the day of payment |
Section 411(7) to (9): reduction or waiver of interest
| Sub-section | Rule |
|---|---|
| (7) | Irrespective of sub-section (3), the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner may, on the assessee's application, reduce or waive interest paid or payable if satisfied that (a) payment has caused or would cause genuine hardship; (b) the default was due to circumstances beyond the assessee's control; and (c) the assessee has co-operated in any inquiry relating to the assessment or any proceeding for recovery of any amount due from him |
| (8) | The order accepting or rejecting the application, in full or in part, must be passed within twelve months from the end of the month in which the application is received |
| (9) | No order rejecting the application, in full or in part, may be passed without giving the assessee an opportunity of being heard |
All three conditions in sub-section (7) must be met; "and" joins them.
Section 411(10) and (11): deemed default
Sub-section (10): if the amount is not paid within the specified time under sub-section (1), or the time extended under sub-section (5), at the place and to the person mentioned in the notice, the assessee shall be deemed to be in default.
Sub-section (11): where payment by instalments is allowed under sub-section (5) and the assessee defaults in paying any one instalment within the time fixed:
- he is deemed to be in default as to the whole of the amount then outstanding; and
- the other instalments are deemed to have been due on the same date as the instalment actually in default.
Example (amounts assumed). Meena Exports is allowed to pay Rs. 90,000 in three instalments of Rs. 30,000 on 30 October, 30 November and 30 December. She pays the first, misses the second, and Rs. 60,000 is outstanding. Under sub-section (11) she is in default on the whole Rs. 60,000 and the third instalment is treated as having fallen due on 30 November.
Section 411(12): appeal pending
Where an assessee has presented an appeal under section 356 or 357, the Assessing Officer may, in his discretion and subject to conditions he thinks fit, treat the assessee as not being in default in respect of the amount in dispute, even though the time for payment has expired, till the appeal remains undisposed of. The word is "may": it is discretionary and the Act does not say the assessee is entitled to it.
Section 411(13) and (14): income that cannot be brought into India
Where an assessee has been assessed on income arising outside India in a country whose laws prohibit or restrict the remittance of money to India, the Assessing Officer shall:
- not treat the assessee as in default for that part of the tax due on the income which, by reason of the prohibition or restriction, cannot be brought into India; and
- continue to treat the assessee as not in default for that part until the prohibition or restriction is removed.
Income is deemed to have been brought into India if it has been utilised or could have been utilised for expenditure actually incurred by the assessee outside India, or if it has been brought into India in any form, whether capitalised or not.
What follows from default
Being deemed in default opens the penalty in section 412 and the recovery steps in sections 413 to 419, which our other articles in this series cover.
Need help with a tax demand?
If a notice of demand is outstanding, the choices in section 411 (an application for time, an appeal, a request to waive interest) each have a time limit. Our legal dispute resolution team helps assessees weigh them and prepare the application.
Key takeaways
- A demand other than advance tax is payable within thirty days of service, or a shorter period approved by the Joint Commissioner.
- Interest on delay is simple interest at 1% for every month or part of a month; sub-section (3) was substituted by the Finance Act, 2026.
- The application for time or instalments must be made before the due date.
- Default on one instalment makes the whole outstanding amount due.
- Interest can be reduced or waived on the three conditions in sub-section (7), by an order within twelve months.
- The Assessing Officer may treat an assessee as not in default while an appeal under section 356 or 357 is pending.
Read next
- Sections 412 to 415: penalty when tax is in default and the tax recovery certificate
- Sections 407, 409 and 410: advance tax order, default and credit
- Section 289: notice of demand
- Section 470: the reasonable cause defence
Disclaimer: Based on the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026, as consulted on 2 October 2026. It explains the words of the Act only; the Income-tax Rules, 2026, notifications, circulars, later amendments and the way the tax authorities and courts apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.