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CMA Final · Direct Tax Laws and International Taxation · Collection, Recovery and Refund of Tax

Under section 418 of the Income-tax Act, 2025, when a foreign government with a recovery agreement sends a certificate for tax due from a resident in India, the Tax Recovery Officer to whom the Board forwards it:

The Tax Recovery Officer recovers the amount as if it were a certificate he had drawn up under section 413, then remits the recovered sum to the Board after deducting his expenses of the recovery proceedings. No consent of the resident is required.

  1. Arecovers as if under his own section 413 certificate and remits the sum to the Board after deducting his expensesCorrect
  2. Breturns it to the foreign government for recovery through its courts
  3. Crecovers the amount and remits the whole sum to the Board without deducting any expenses
  4. Dcan act only after the Board obtains the resident's consent

Explanation

Section 418(1) directs the Tax Recovery Officer to proceed in the manner of a certificate drawn up under section 413 and to remit the recovered sum to the Board after deducting his expenses. Hence remittance without deducting expenses is wrong, and no consent is needed.

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