Section 419 · Collection & recovery
Section 419 of the Income-tax Act, 2025 — Recovery of Penalties, Fine, Interest and Other Sums
By CA Rajat Agrawal
Updated 05 Jul 2026
Chapter XIX
📜 What the law says — Section 419, Income-tax Act 2025
419. Any sum imposed by way of interest, fine, penalty, or any other sum payable
under the provisions of this Act, shall be recoverable in the manner provided
in this Part for the recovery of arrears of tax.
Tax clearance certificate.
420.
(1) Subject to such exceptions as the Central Government may, by
notification, specify in this behalf, no person,—
(a) who is not domiciled in India;
(b) who has come to India in connection with business, profession or
employment; and
(c) who has income derived from any source in India,
shall leave the territory of India by land, sea or air unless he furnishes to such
authority as may be prescribed—
(i) an undertaking in the prescribed form from his employer; or
(ii) through whom such person is in receipt of the income,
to the effect that tax payable by such person who is not domiciled in India shall be
paid by the employer referred to in clause (i) or the person referred to in clause (ii),
and the prescribed authority shall, on receipt of the undertaking, immediately give
to such person a no objection certificate, for leaving India.
(2) Nothing contained in sub-section (1) shall apply to a person who is not domiciled
in India but visits India as a foreign tourist or for any other purpose not connected
with business, profession or employment.
(3) Subject to such exceptions as the Central Government may, by notification,
specify in this behalf, every person, who is domiciled in India at the time of his
departure from India, shall furnish—
(a) the Permanent Account Number allotted to him under section 262;
(b) the purpose of his visit outside India; and
(c) the estimated period of his stay outside India,
to the income-tax authority or such other authority in such form, as may be
prescribed.
(4) Where no such Permanent Account Number has been allotted to any person
referred to in sub-section (3), or his total income is not chargeable to income-tax,
or he is not required to obtain a Permanent Account Number under this Act, such
person shall furnish a certificate in such form, as may be prescribed.
(5) No person—
(a) who is domiciled in India at the time of his departure; and
(b) in respect of whom circumstances exist which, in the opinion of an
income-tax authority render it necessary for such person to obtain a
certificate under this section,
shall leave the territory of India by land, sea or air unle
In plain language
What Section 419 actually says
Section 419 of the Income-tax Act, 2025 is a short but powerful "bridge" provision. In plain words it says: any sum imposed by way of interest, fine, penalty, or any other sum payable under the Act shall be recoverable in the same manner as arrears of tax under this Part (the recovery Part of the Act). It does not create a new tax; it simply tells the department that once a penalty, interest amount or fine becomes payable, the tax authorities can chase it using the very same recovery machinery they use for unpaid tax.
This section is the 2025 Act's replacement for the old Section 229 of the Income-tax Act, 1961, carried forward almost word-for-word. It sits in the recovery Part alongside Section 411 (when an assessee is "deemed in default"), the demand notice provision (Section 289, the 2025 equivalent of the old Section 156), and Section 421 (recovery by suit not affected).
Why this provision matters
- No separate recovery code for penalties: Without Section 419, the department might have to argue that a penalty is not "tax" and therefore cannot be recovered by attachment or garnishee. This section removes that doubt entirely.
- Same coercive tools apply: Attachment and sale of movable/immovable property, garnishee notices to banks and debtors, appointing a receiver, and even arrest and detention in the manner prescribed — all become available for penalties, interest and fines.
- Uniformity: It ensures a single, consistent recovery mechanism for every money obligation under the Act, so the taxpayer and the Tax Recovery Officer both know exactly what procedure applies.
Who it applies to
- Every assessee — individuals, HUFs, firms, LLPs, companies, trusts — who has an outstanding penalty, interest, fine or "other sum".
- Deductors and collectors in the TDS/TCS context: late-deduction interest, late-payment interest, late-filing fees and TDS/TCS penalties are all "sums payable under the Act" and are therefore recoverable through Section 419.
- Representative assessees, legal heirs and successors, to the extent they are liable for the underlying dues.
Key conditions and how the machinery is triggered
- A demand must exist first. A notice of demand (Section 289, old Section 156) is served specifying the amount. Section 419 only governs the manner of recovery, not the creation of the liability.
- The taxpayer must be in default. Under Section 411 (old Section 220), the amount is usually payable within 30 days; failure to pay makes the person an assessee-in-default and opens the door to recovery.
- Interest keeps running. Interest for non-payment continues to accrue on the outstanding demand, and that interest itself is recoverable under Section 419.
- No fresh threshold or rate is introduced by Section 419 — the rate/limit of the penalty, fine or interest comes from the specific charging section (for example the interest and fee sections and the various penalty sections of the Act).
How it interacts with related sections
Section 419 is deliberately linked to the rest of the recovery Part. The demand is raised under Section 289; default and interest on default flow from Section 411; the Tax Recovery Officer's powers and the certificate procedure are the same ones used for tax arrears; and Section 421 preserves the Government's right to recover by suit or under any other law in addition to these modes. So a penalty can be recovered by attachment and, if needed, by a civil suit.
Practical implications for taxpayers
- Treat a penalty notice as seriously as a tax notice. The consequences of ignoring it — attachment of your bank account or property — are identical.
- Interest and late fees are "recoverable sums" too. A TDS deductor who thinks a Section 234E-type late fee is "only a fee" should note it can be enforced like tax.
- File a stay application before the demand becomes recoverable if you are contesting the penalty in appeal; a mere appeal does not automatically stop recovery.
- Pay or dispute quickly within the demand window to avoid becoming an assessee-in-default and triggering coercive recovery.
💡 Example
Worked example 1 — a penalty recovered like tax. Suppose an individual is levied a penalty of Rs 2,00,000 and a demand notice under Section 289 gives 30 days to pay. He ignores it. Once the 30 days lapse he is "deemed in default" under Section 411. The Tax Recovery Officer can now, by virtue of Section 419, attach his savings account and recover the Rs 2,00,000 exactly as if it were unpaid tax — plus interest for non-payment that continues to run on the Rs 2,00,000 until it is cleared.
Worked example 2 — TDS interest and late fee. A company deducts TDS of Rs 5,00,000 but deposits it two months late. It owes interest for late payment (say Rs 5,00,000 x 1.5% x 2 months = Rs 15,000) plus a late-filing fee on the TDS statement. Both the Rs 15,000 interest and the fee are "sums payable under the Act". If unpaid after demand, Section 419 lets the department recover them through garnishee or attachment, just like the core TDS itself.
A short story. Meera, a small business owner in Jaipur, won her main assessment appeal but forgot about a Rs 40,000 penalty demand sitting unpaid for months. She assumed "it's just a penalty, they can't touch my account." One morning her bank froze part of her balance under a recovery notice. Her CA explained Section 419: a penalty is recovered exactly like tax. Had she filed a stay application or paid the Rs 40,000 within the 30-day window, the freeze would never have happened.
| Aspect | Position under Section 419, Income-tax Act 2025 |
|---|
| What is covered | Interest, fine, penalty and any other sum payable under the Act |
| Manner of recovery | Same as recovery of arrears of tax under this Part |
| 1961 Act equivalent | Section 229 (recovery of penalties, fine, interest and other sums) |
| Demand notice provision | Section 289, 2025 Act (old Section 156) |
| Deemed in default / payment window | Section 411, 2025 Act (old Section 220) — usually 30 days |
| Recovery tools available | Attachment and sale of property, garnishee, receiver, arrest/detention as prescribed |
| Creates a new charge/rate? | No — only the manner of recovery; rate/amount comes from the specific charging section |
| Recovery by civil suit | Also preserved separately under Section 421 |
Related sections
Section 289 — Notice of demand (old Section 156) Section 411 — When tax payable and when assessee deemed in default Section 414 — Tax Recovery Officer by whom recovery is to be effected Section 421 — Recovery by suit or under other law not affected Section 422 — Recovery of tax arrear of a non-resident from his assets Section 424 — Interest for defaults in furnishing return of income
Frequently asked questions
What does Section 419 of the Income-tax Act, 2025 deal with?
It provides that any penalty, fine, interest or other sum payable under the Act is recoverable in the same manner as arrears of tax. It is a procedural bridge, not a new levy.
Which section of the old 1961 Act does Section 419 replace?
It corresponds to Section 229 of the Income-tax Act, 1961, which carried the same title and effect. The language has been carried forward almost unchanged into the 2025 Act.
Can the department attach my bank account to recover a penalty?
Yes. Because Section 419 says penalties are recovered like tax, the Tax Recovery Officer can use garnishee notices to your bank and attach property once you are in default after a demand notice.
Does Section 419 create any new penalty or interest rate?
No. It does not fix any rate, limit or threshold. The amount comes from the specific penalty, fine or interest section; Section 419 only governs how that amount is collected.
Are TDS/TCS late fees and interest recoverable under Section 419?
Yes. Late-payment interest, late-deduction interest and late-filing fees are all sums payable under the Act, so they can be recovered using the same machinery as unpaid TDS or tax.
Does filing an appeal stop recovery of a penalty under Section 419?
Not automatically. You should apply for a stay of demand; otherwise, once you are deemed in default, recovery proceedings can proceed even while your appeal is pending.
How long do I get to pay before recovery starts?
Under Section 411 (old Section 220) the demand is generally payable within 30 days of the notice. After that you become an assessee-in-default and Section 419 recovery can begin.
C
CA Rajat Agrawal
Chartered Accountant, EaseValue · Reviewed 05 Jul 2026
This explainer is prepared and reviewed by EaseValue's tax team, based on the text of the Income-tax Act, 2025 (as amended by the Finance Act, 2026).
Disclaimer: This page explains the law in general terms for education and is not professional advice. The Income-tax Act, 2025 takes effect from 1 April 2026; provisions, thresholds and interpretations may change. Please confirm your specific position with our team before acting.
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