CBDT drops arrest, detention provisions from tax recovery rules

Richa Sawhney, Partner – Tax, Grant Thornton Bharat said 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.

“This amendment aligns Rule 225 with the changes introduced by the Finance Act, 2026 and reflects a shift towards property-based recovery measures,” she said.

Also, the CBDT’s notification gives existing valuers and authorised income-tax practitioners additional six months time, until March 31, 2027, to complete their registration under the new Income-tax Act, 2025 framework.

This extension should help ensure a smoother transition to the new regime, particularly because the registration forms now require detailed disclosures relating to qualifications, experience and eligibility, experts said.

Under the Form 169, which is to be used by individuals seeking registration as valuers under section 514 of the Income-tax Act, 2025, applicants are required to furnish key personal and professional particulars, including PAN, contact details, educational qualifications, professional certifications, relevant valuation experience and the class of assets for which registration is sought.

With this, the registration framework is being streamlined to ensure that valuation assignments for tax purposes are carried out by qualified and independent professionals. Registered valuers are expected to undertake impartial valuations, issue valuation reports in the prescribed form, follow the prescribed fee structure and avoid assignments where they have a direct or indirect interest in the asset being valued.

Under Form 171, individuals will be required to seek registration as authorised income-tax practitioners under Section 515 of the Income-tax Act, 2025. Applicants are also required to provide supporting documents for their qualifications and disclose matters that may affect eligibility, including convictions involving fraud or dishonesty, insolvency proceedings, removal or dismissal from government service, or findings of professional misconduct by a relevant professional body.

“The revised registration framework reflects a clear policy intent to professionalise tax valuation and representation. By insisting on qualification, disclosure and independence at the entry stage, CBDT is moving towards a more accountable ecosystem for taxpayers and tax professionals alike,” said Riaz Thingna, Partner, Grant Thornton Bharat.