Penalties Section 220(2) — Interest on Tax Demand Not Paid Within 30 Days
Section 220(2) — Interest on Tax Demand Not Paid Within 30 Days
Income Tax Act 1961 — 220(2)
1% per month simple interest on any tax demand not paid within 30 days of service of the demand notice.
The Penalty
1% per month
- Cap
- None stated
- Calculation base
- Amount specified in the demand notice
- Period
- From the day immediately following the 30-day window, until actual payment.
When does this apply?
Failure to pay a tax demand (assessment / rectification / regular demand notice u/s 156) within 30 days of service.
Calculate this amount
This estimate applies only the rate and caps published in the authored rule for this page.
₹2,000₹1,00,000 × 1% × 2 months
Worked examples
| Scenario | Calculation | Result |
|---|---|---|
| Demand ₹1,00,000 unpaid for 4 months after 30-day window | ₹1,00,000 × 1% × 4 = ₹4,000 | ₹4,000 |
How it is levied
Automatic on non-payment. Part-month is treated as full month. AO may reduce / waive under s.220(2A) for hardship, subject to strict conditions.
⚠ VERIFY
Confirm the 30-day window has not been shortened for the specific demand type (e-assessment / faceless orders may have separate procedural timelines).