CBDT removes arrest, detention provisions from tax recovery rules
Sep 18, 2026
The tax department has also given valuers and authorised income-tax practitioners six more months, until March 31, 2027, to complete their registration
The Central Board of Direct Taxes (CBDT) has removed provisions relating to arrest and detention from the prescribed process for recovery of tax arrears, while giving valuers and authorised income-tax practitioners six more months to complete their registration under the new Income-tax Act, 2025, framework.
In a notification issued on September 17, the CBDT amended Rule 225 of the Income-tax Rules, 2026, which deals with recovery of tax arrears. The amendment omits a provision that referred to the power to arrest and removes the words “except arrest and detention” from another provision. It also deletes several other sub-rules of Rule 225. The amendments to Rules 2 to 4, including Rule 225, have been given retrospective effect from April 1, 2026.
“The removal of arrest and detention provisions from the prescribed tax recovery rules with retrospective effect from 1 April 2026 is an important change. In practical terms, tax recovery will continue through attachment and sale of assets and other recovery mechanisms, but personal arrest will no longer form part of the prescribed recovery process under these Rules,” said Richa Sawhney, partner, Grant Thornton Bharat.
“This amendment aligns Rule 225 with the changes introduced by the Finance Act, 2026 and reflects a shift towards property-based recovery measures,” she added.
Separately, the CBDT has extended by six months the deadline under Rules 246 and 256 for registration of valuers and authorised income-tax practitioners. The deadline of September 30, 2026, has been extended to March 31, 2027.
The notification also substitutes Form 169, the application form for registration as a valuer under Section 514 of the Income-tax Act, 2025. The revised form requires applicants to provide details of their personal information, the class of asset for which registration is sought, educational qualifications, former employment and professional experience. Valuers also have to provide details of assets valued or works executed during the preceding three years.
The form provides for registration across 11 classes of assets, including immovable property, agricultural land, plantations, forests, mines and quarries, securities, machinery and plant, jewellery and works of art. A separate application is required for each class of asset. The application carries a ₹10,000 fee, although valuers already registered under the Wealth-tax Act, 1957, are exempt from the fee.
The CBDT has also replaced Form 171, the application form for registration as an authorised income-tax practitioner. The revised form seeks details such as educational qualifications and existing registration under the Income-tax Act, 1961. Applicants have to certify that they have been practising before income-tax authorities for at least one year.
The notification has also amended Rule 176 to replace the requirement of serving certain communications “by affixing digital signature” with service “by way of an electronic communication”. The changes have been notified as part of the Income-tax (Fourth Amendment) Rules, 2026.
[The Business Standard]
