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CS Executive · Tax Laws and Practice · Procedural Compliance under Income Tax

Under the Income-tax Act, 2025 (applicable from the June 2027 session), how are interest, fine, penalty or any other sum payable under the Act recovered by the department?

Interest, fine, penalty and other sums payable under the Income-tax Act, 2025 are recoverable in the same manner as arrears of tax, using the recovery machinery in the relevant Part of the Act. No separate civil suit is required.

  1. AOnly by filing a civil suit against the assessee
  2. BIn the manner provided for recovery of arrears of taxCorrect
  3. COnly by adjusting against future refunds, never by coercive steps
  4. DThrough prosecution proceedings alone

Explanation

Section 419 provides that any sum imposed by way of interest, fine, penalty or any other sum payable under the Act is recoverable in the manner provided in that Part for recovery of arrears of tax. A separate civil suit, refund adjustment only, or prosecution alone is not the prescribed route.

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