Liability of person in respect of income included in income of another person
[As per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Where, income of a person, other than the assessee, arising from any asset, or income from membership of a firm, is included in the total income of the assessee under this Chapter or under section 25(a), then, irrespective of anything to the contrary contained in any other law in force,––
- (a) such person, in whose name such asset stands, shall be liable to pay, that portion of the tax levied on the assessee which is attributable to the income so included, upon service of notice of demand by the Assessing Officer in this behalf;
- (b) where any such asset is held jointly by more than one person, they shall be jointly and severally liable to pay such tax; and
- (c) the provisions of Chapter XIX-D shall apply accordingly.
FAQs on Section 100 of Income Tax Act 2025
Q1. What does Section 100 of the Income Tax Act, 2025 deal with?
Section 100 deals with the liability of a person in respect of income included in the income of another person.
Q2. From when is Section 100 effective?
Section 100 is effective from 1st April, 2026.
Q3. Whose income is covered under Section 100?
It covers income of a person, other than the assessee, arising from any asset or from membership of a firm.
Q4. Under what circumstances is another person’s income included in the assessee’s income?
When it arises from any asset or from membership of a firm and is included under this Chapter or under section 25(a).
Q5. Does Section 100 override other laws?
Yes, it applies irrespective of anything to the contrary contained in any other law in force.
Q6. Who is liable to pay tax under Section 100(a)?
The person in whose name such asset stands is liable to pay the portion of tax attributable to the income so included.
Q7. How is the liability enforced on such person?
The Assessing Officer serves a notice of demand on the person in this behalf.
Q8. What happens if the asset is held jointly by multiple persons?
All such persons are jointly and severally liable to pay the portion of tax attributable to the income.
Q9. What does “jointly and severally liable” mean in this context?
It means each person is individually as well as collectively responsible for paying the full amount of tax attributable to the income.
Q10. Are there any procedural provisions that apply to such recovery?
Yes, the provisions of Chapter XIX-D apply accordingly.
Q11. Can the tax authorities recover the tax from either or all joint holders of the asset?
Yes, since they are jointly and severally liable, tax can be recovered from any or all of them.
Q12. Is the amount of tax recoverable limited to the portion attributable to the included income?
Yes, only that portion of the tax which relates to the income included is recoverable from such person.
Q13. Does Section 100 apply if the assessee has already paid the tax?
If the assessee has already paid the full tax, there would generally be no need to invoke Section 100 against the other person.
Q14. What is the role of the Assessing Officer under Section 100?
The Assessing Officer issues a notice of demand to the person liable under Section 100.
Q15. Is the person liable under Section 100 considered an assessee?
The Act does not reclassify such a person as an assessee merely because of the liability under Section 100.
Q16. Does Section 100 require a separate assessment on the person in whose name the asset stands?
No, the liability arises directly upon service of notice without the need for a separate assessment.
Q17. Is the liability under Section 100 automatic or does it require any action?
It requires action by the Assessing Officer through a notice of demand.
Q18. Can the person liable under Section 100 dispute the inclusion of income?
The Act primarily deals with liability after income is included; challenges to inclusion may have to be addressed separately under applicable procedures.
Q19. Does Section 100 specify any limit or cap on the liability?
Yes, it is limited to the portion of the tax attributable to the included income.
Q20. Can multiple persons sharing ownership of an asset divide the tax payment among themselves?
While they may arrange among themselves, from the Department’s perspective, they are jointly and severally liable for the full amount.
Q21. Is the notice of demand under Section 100 appealable?
Yes, a notice of demand is generally appealable under the applicable provisions of the Act.
Q22. What is meant by “asset” under Section 100?
It generally refers to any property, right, or interest from which income arises, as per the context of the Act.
Q23. How does Section 100 relate to section 25(a)?
Section 100 applies where income is included under this Chapter or specifically under section 25(a).
Q24. Is Section 100 applicable only to individuals?
No, it applies to any person in whose name the asset stands or who holds the asset jointly.
