Assessment of persons likely to transfer property to avoid tax
[Section-319 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 319(1) of Income Tax Act 2025
319(1) Irrespective of anything contained in section 4, where it appears to the Assessing Officer during any current tax year that any person is likely to charge, sell, transfer, dispose of or otherwise part with any of his assets with a view to avoiding payment of any liability under the provisions of this Act, the total income of such person for the period beginning from the first day of that current tax year up to the date when the Assessing Officer commences proceedings under this section shall be chargeable to tax in current tax year.
Section 319(2) of Income Tax Act 2025
319(2) For the purpose of sub-section (1), the provisions of section 317(2) to (6) shall, so far as may be, apply to any proceedings in the case of any such person as they apply in the case of persons leaving India.
FAQs on Section 319 of Income Tax Act 2025
What does Section 319(1) of the Income Tax Act, 2025 deal with?
Section 319(1) deals with the assessment of individuals who are likely to transfer property to avoid payment of tax. It allows the Assessing Officer to assess such persons’ income up to the date proceedings commence in the same current tax year.
When can an Assessing Officer invoke Section 319(1)?
The Assessing Officer can invoke Section 319(1) when it appears during a current tax year that a person is likely to part with assets to avoid any tax liability under the Act.
Does Section 319(1) override other provisions?
Yes, Section 319(1) applies notwithstanding anything contained in Section 4 of the Act.
What is the time period for which income is assessed under Section 319(1)?
Income is assessed for the period starting from the first day of the current tax year up to the date the Assessing Officer initiates proceedings under this section.
What kind of actions might trigger Section 319(1)?
Actions like charging, selling, transferring, disposing of, or otherwise parting with assets with an intent to avoid tax liabilities can trigger this section.
Can income be taxed in the same tax year under Section 319?
Yes, income assessed under Section 319(1) is chargeable to tax in the same current tax year, not in a future or previous year.
What does Section 319(2) specify?
Section 319(2) states that the provisions of Section 317(2) to (6) apply to the proceedings under Section 319(1) to the extent possible, similar to provisions for persons leaving India.
What does the application of Section 317(2) to (6) imply in context of Section 319?
It implies that procedural rules—such as special assessments, deadlines, and rights of appeal—applicable to persons leaving India under Section 317, will also apply to persons transferring assets to avoid tax, as per Section 319.
Does the Assessing Officer need to prove actual transfer of property?
No, even the likelihood or intention to transfer property to avoid tax is sufficient for the Assessing Officer to invoke Section 319.
Is there a minimum threshold of tax liability to trigger Section 319?
The Act does not specify any minimum threshold; the focus is on the likelihood of transfer with intent to avoid any liability under the Act.
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