Section 517 of the Income-tax Act, 2025 — Receipt to be Given for Tax Paid

In plain language

What Section 517 actually says

Section 517 of the Income-tax Act, 2025 is one of the shortest and simplest provisions in the entire law. In substance it states: "A receipt shall be given for any money paid or recovered under this Act." That single sentence carries a powerful protection for every taxpayer in India — whenever you hand over money to the tax system, or the department recovers money from you, you are legally entitled to a receipt acknowledging that payment.

This section sits in the miscellaneous chapter of the 2025 Act and is the direct successor to Section 289 of the old Income-tax Act, 1961. The language has been carried forward almost word for word, so decades of settled understanding continue to apply. The 2025 Act simply renumbers and modernises it while keeping the taxpayer safeguard intact.

Who does it apply to, and who must give the receipt

The obligation to issue a receipt falls on the "receiving authority" — that is, whoever collects the money under the Act. In today's largely digital system this includes:

• Authorised banks that accept challan payments (advance tax, self-assessment tax, TDS/TCS deposits).
• The income-tax e-filing / e-pay-tax portal, which generates an electronic challan acknowledgement (the counterfoil with a Challan Identification Number or CIN, and now the Basic Statistical Return / BSR-type acknowledgement).
• Assessing Officers and recovery / Tax Recovery Officers when they collect cash, cheque, or recover arrears through attachment, garnishee action or sale of property.

The taxpayer is the beneficiary of the section. You do not have to specially request the receipt — the word "shall" makes issuing it mandatory on the person receiving the money.

What money is covered

• Voluntary payments — advance tax, self-assessment tax under Section 423 (old 140A), regular tax on demand, and TDS/TCS deposited with the government.
• Recovered sums — tax arrears, interest, penalty and fees recovered coercively by the department, including through attachment of bank accounts or sale of assets.
• Any money "under this Act" — the phrase is deliberately wide, so fees, penalties and interest are all covered, not just the basic tax.

Key features and limits of the section

• It is mandatory but skeletal. The section says a receipt "shall be given" but is silent on the form, content, timing, mode of delivery, and consequences of non-issuance. These operational details are filled in by the Income-tax Rules, 2026, CBDT circulars and everyday administrative practice (challan formats, digital acknowledgements, etc.).
• A receipt is an acknowledgement, not an automatic discharge. Getting a receipt proves you paid a certain sum on a certain date. It does not by itself mean your entire liability is cleared — if you paid less than what was due, the balance still stands. The receipt is strong evidence of payment, not conclusive proof that nothing more is owed.
• No penalty is written into the section. Unlike many provisions, Section 517 prescribes no fine for failure to issue a receipt. In practice, refusal to give a receipt would be challenged as maladministration and through grievance / RTI channels rather than a penalty under this section.
• Electronic acknowledgements count. The modern challan counterfoil, CIN, and portal-generated PDF acknowledgements satisfy the requirement of a "receipt". You should download and preserve these.

How it interacts with related sections

Section 517 works alongside the payment and recovery machinery of the Act. The self-assessment tax you compute and pay generates a challan receipt; the advance-tax instalments you deposit generate quarterly challan receipts; and if the department recovers arrears through the recovery provisions, that recovery too must be receipted. The receipt (with its CIN/challan details) is what lets these payments be matched against your Annual Information Statement (AIS) and Form 26AS-type tax credit statement, and claimed in your return.

Practical implications for the ordinary taxpayer

• Always keep the challan / acknowledgement. For online payments, download the PDF immediately; note the CIN, BSR code, challan serial number and date. These are your proof under Section 517.
• Never pay tax in cash without a receipt. If any officer collects money, insist on a written, stamped receipt showing the amount, date and the head of payment.
• Match your receipts to your tax credit statement. If a payment does not reflect in your AIS/26AS, the receipt is your primary evidence to get it corrected.
• During recovery proceedings, demand a receipt for every rupee recovered — this protects you from a second demand for the same amount.

In short, Section 517 is a quiet but important taxpayer-rights provision: it guarantees you paperwork for your money. Combined with today's digital challan system, it means every payment you make to the tax department leaves a verifiable trail you can rely on.