Other modes of recovery
[Section-416 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 416(1) of Income Tax Act 2025
416(1) Where no certificate has been drawn up under section 413, the Assessing Officer may recover the tax by any one or more of the modes provided in this section.
Section 416(2) of Income Tax Act 2025
416(2) Where a certificate has been drawn up under section 413, the Tax Recovery Officer may, without prejudice to the modes of recovery specified in that section, recover the tax by any one or more of the modes provided in this section.
Section 416(3) of Income Tax Act 2025
416(3) If any assessee is in receipt of any income chargeable under the head “Salaries”, the Assessing Officer or Tax Recovery Officer may require any person paying the same to deduct from any payment subsequent to the date of such requisition any arrears of tax due from such assessee and such person shall comply with the said requisition and shall pay the sum so deducted to the credit of the Central Government or as the Board directs.
Section 416(4) of Income Tax Act 2025
416(4) Nothing contained in sub-section (3) shall apply to any part of the salary exempted from attachment in execution of a decree of a civil court under section 60 of the Code of Civil Procedure, 1908.
Section 416(5) of Income Tax Act 2025
416(5)(a) The Assessing Officer or Tax Recovery Officer may, at any time or from time to time, by notice in writing require any person—
- (i) from whom money is due or may become due to the assessee; or
- (ii) who holds or may subsequently hold money for or on account of the assessee,
- to pay to the Assessing Officer or Tax Recovery Officer—
- (I) either forthwith upon the money becoming due or being held; or
- (II) at or within the time specified in the notice (not being before the money becomes due or is held),
- so much of the money as is sufficient to pay the amount due by the assessee in respect of arrears or the whole of the money when it is equal to or less than that amount;
416(5)(a)(b) A notice under this sub-section may be issued to any person who holds or may subsequently hold any money for or on account of the assessee jointly with any other person;
416(5)(a)(c) For the purposes of this sub-section, the shares of the joint holders in the account, as referred in clause (b), shall be presumed, until the contrary is proved, to be equal;
416(5)(a)(d) A copy of the notice under this sub-section shall be forwarded to—
- (i) the assessee; and
- (ii) in the case of a joint account to all the joint holders, at his or their last addresses known to the Assessing Officer or Tax Recovery Officer;
416(5)(a)(e) Save as otherwise provided in this sub-section, every person to whom a notice is issued under that sub-section shall be bound to comply with such notice, and, in particular, where any such notice is issued to a post office, banking company or an insurer, it shall not be necessary for any pass book, deposit receipt, policy or any other document to be produced for the purpose of any entry, endorsement or the like being made before payment is made, irrespective of any rule, practice or requirement to the contrary;
416(5)(a)(f) Any claim respecting any property in relation to which a notice under this sub-section has been issued arising after the date of the notice shall be void as against any demand contained in the notice;
416(5)(a)(g) Where a person, to whom a notice under this sub-section is issued, objects to it by a statement on oath that—
- (a) the sum demanded or any part thereof is not due to the assessee; or
- (b) he does not hold any money for or on account of the assessee,
then nothing contained in that sub-section shall be deemed to require such person to pay any such sum or part thereof;
416(5)(a)(h) Where it is discovered that the statement under was false in any material particular, such person shall be personally liable to the Assessing Officer or Tax Recovery Officer to the extent of his own liability to the assessee on the date of the notice, or to the extent of the assessee’s liability for any sum due under this Act, whichever is less;
416(5)(a)(i) The Assessing Officer or Tax Recovery Officer may, at any time or from time to time, amend or revoke any notice issued under this sub-section or extend the time for making any payment in pursuance of a notice issued under the said sub-section;
416(5)(a)(j) The Assessing Officer or Tax Recovery Officer shall grant a receipt for any amount paid in compliance with a notice issued under this sub-section, and the person so paying shall be fully discharged from his liability to the assessee to the extent of the amount so paid;
416(5)(a)(k) Any person discharging any liability to the assessee after receipt of a notice under this sub-section shall be personally liable to the Assessing Officer or the Tax Recovery Officer—
- (i) to the extent of his own liability to the assessee so discharged; or
- (ii) to the extent of the assessee’s liability for any sum due under this Act,
- whichever is less.
416(5)(a)(l) If the person to whom a notice under this sub-section is issued fails to make payment in pursuance thereof to the Assessing Officer or Tax Recovery Officer,—
- (i) he shall be deemed to be an assessee in default in respect of the amount specified in the notice and further proceedings may be taken against him for the realisation of the amount as if it were an arrear of tax due from him, in the manner provided in sections 413 to 415; and
- (ii) the notice shall have the same effect as an attachment of a debt by the Tax Recovery Officer in exercise of his powers under section 413.
Section 416(6) of Income Tax Act 2025
416(6) The Assessing Officer or Tax Recovery Officer may apply to the court in whose custody there is money belonging to the assessee—
- (a) for payment to him of the entire amount of such money; or
- (b) if it is more than the tax due, an amount sufficient to discharge the tax.
Section 416(7) of Income Tax Act 2025
416(7) The Assessing Officer or Tax Recovery Officer may, if so authorised by an income-tax authority not below the rank of commissioner by general or special order, recover any arrears of tax due from an assessee by distraint and sale of his movable property in the manner as prescribed.
FAQs on Section 416 of Income Tax Act 2025
What does Section 416(1) of the Income Tax Act, 2025 empower the Assessing Officer to do?
If no certificate has been drawn under Section 413, the Assessing Officer can recover tax using one or more modes provided in Section 416.
Can the Tax Recovery Officer recover tax under Section 416 even after a certificate is drawn under Section 413?
Yes, under Section 416(2), the Tax Recovery Officer may recover tax through the modes in Section 416 in addition to those in Section 413.
Can salary payments be intercepted for tax recovery under Section 416?
Yes, under Section 416(3), if an assessee receives salary income, the Assessing Officer or Tax Recovery Officer may direct the employer to deduct arrears of tax from subsequent salary payments.
Is there any protection for exempt portions of salary under Section 416?
Yes, Section 416(4) provides that the exempt part of the salary, as per Section 60 of the Code of Civil Procedure, 1908, is not subject to recovery.
What authority does Section 416(5)(a) grant the tax authorities?
The Assessing Officer or Tax Recovery Officer may issue a notice requiring any person who owes or may owe money to the assessee to pay that amount to the tax authorities instead.
Can notices be issued to joint account holders under Section 416?
Yes, notices can be issued to joint holders as per Section 416(5)(a)(b), and their shares are presumed equal unless proven otherwise.
Is the assessee informed if a notice is issued to a third party?
Yes, under Section 416(5)(a)(d), a copy of the notice must be forwarded to the assessee and to any joint holders.
Are institutions like banks or post offices required to follow specific formalities before complying with the notice?
No, Section 416(5)(a)(e) states that they must comply without needing to produce passbooks, policies, or other documents, regardless of any contrary rules or practices.
What happens to property claims made after issuance of a notice under Section 416?
Any such claims are void against the demand in the notice as per Section 416(5)(a)(f).
Can a person object to a notice under Section 416(5)?
Yes, under Section 416(5)(a)(g), a person may object by a sworn statement if they don’t owe or hold money for the assessee.
What is the consequence of making a false statement in response to a notice?
If the statement is false, the person is personally liable for the lesser of their liability to the assessee or the assessee’s tax liability as per Section 416(5)(a)(h).
Can the notice issued under Section 416 be modified?
Yes, under Section 416(5)(a)(i), the Assessing Officer or Tax Recovery Officer may amend, revoke, or extend the time for payment under the notice.
Does the person paying under notice get a discharge from liability?
Yes, Section 416(5)(a)(j) provides that a receipt is issued and the payer is fully discharged from liability to the assessee up to the amount paid.
What is the consequence of ignoring a notice under Section 416(5)?
Under Section 416(5)(a)(l), the person is deemed an assessee in default, and recovery proceedings may be initiated as though they owe the tax themselves.
Can tax be recovered from money held by a court on behalf of the assessee?
Yes, under Section 416(6), the Assessing Officer or Tax Recovery Officer may apply to the court for payment of such money to discharge the tax liability.
Is the Assessing Officer or Tax Recovery Officer allowed to sell movable property to recover arrears?
Yes, under Section 416(7), if authorised by an income-tax authority not below the rank of commissioner, they may recover arrears through distraint and sale of movable property as prescribed.
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