Rule 225 Recovery explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 225 recovery under the Income-tax Rules, 2026 opens with a fifteen-day notice from the Tax Recovery Officer and offers four modes — sale of movable or immovable property, arrest and detention, or a receiver — with exemptions borrowed from the Code of Civil Procedure.
What rule 225 is
Rule 225 is the procedure for recovery of tax for the purposes of sections 413 and 475, and it is the longest rule in the Income-tax Rules, 2026 — ninety-five sub-rules. It is the successor to the Second Schedule of the Income-tax Act, 1961, and it carries that Schedule's structure across almost intact. This article covers sub-rules (1) to (20): the definitions, the notice, the modes, the proceeds, and the safeguards that apply to every rule 225 recovery proceeding.
The six definitions
| Expression | Meaning under rule 225(1) |
|---|---|
| Certificate | Except in sub-rules (7), (44), (65) and 66(b), the certificate drawn up by the Tax Recovery Officer under section 413 |
| Defaulter | The assessee mentioned in the certificate |
| Execution | Recovery of arrears in pursuance of the certificate |
| Movable property | Includes growing crops |
| Officer | A person authorised to make an attachment or sale under the rule |
| Share in a corporation | Includes stock, debenture-stock, debentures or bonds |
The definition is expressly disapplied in sub-rules (7), (44), (65) and 66(b). In those four places the word means a certificate of sale or of authority issued by the Tax Recovery Officer to a purchaser or a defaulter, not the recovery certificate under section 413. Reading the section 413 meaning into a sale certificate under sub-rule (65) inverts the sense of the provision entirely.
The notice and when execution may start
Sub-rule (2): when a certificate has been drawn up, the Tax Recovery Officer shall cause a notice to be served requiring payment within fifteen days from the date of service, intimating that in default steps would be taken. Sub-rule (3) then controls the timing of every rule 225 recovery step:
| Clause | Rule |
|---|---|
| (a) | No step in execution until the fifteen days since service have elapsed |
| (b) | Exception — where the officer is satisfied the defaulter is likely to conceal, remove or dispose of movable property liable to attachment and realisation would be delayed or obstructed, he may at any time, for reasons recorded in writing, direct attachment |
| (c) | If the defaulter then furnishes security to the officer's satisfaction, the attachment shall be cancelled from the date the security is accepted |
Note the asymmetry in clause (b): the early attachment power extends to movable property only, and only property that would be liable to attachment in execution of a civil decree.
The four modes of rule 225 recovery
Sub-rule (4): if the amount is not paid within the notice period or such further time as the Tax Recovery Officer may grant in his discretion, he shall proceed by one or more of:
- (a) attachment and sale of the defaulter's movable property;
- (b) attachment and sale of his immovable property;
- (c) arrest of the defaulter and his detention in prison;
- (d) appointing a receiver for the management of his movable and immovable properties.
The words "one or more" matter: the modes are cumulative, not alternatives, and nothing in rule 225 recovery requires the officer to exhaust property before moving to arrest.
Interest, costs and what the purchaser gets
Sub-rule (5): recoverable in execution are interest under section 411(3) on the tax, penalty or other sum, and all charges incurred in serving the notice, in warrants and other processes, and in all other proceedings taken for realising the arrears.
Sub-rule (6) on title: what vests in a purchaser is merely the right, title and interest of the defaulter at the time of the sale, even though the property itself is specified. For immovable property whose sale has become absolute, that interest is deemed to have vested from the time the property was sold, not from when the sale became absolute.
Sub-rule (6)(a) is the most important sentence in the rule for anyone bidding. The auction conveys the defaulter's right, title and interest — nothing more. A prior mortgage, a co-owner's share, a tenancy or a defective title survives the sale untouched. The relation-back in clause (b) then fixes the purchaser's interest at the date of sale, so anything the defaulter did between the sale and its confirmation cannot cut it down. Both halves point the same way: due diligence on title is the bidder's own responsibility.
Rule 225 recovery proceeds, and the bar on civil suits
Sub-rule (8) applies the proceeds of a rule 225 recovery in a fixed order:
| Order | Applied to |
|---|---|
| First | The amount due under the certificate in execution of which the assets were realised, and the costs of that execution |
| Second | Any other amount recoverable from the assessee under the Act, due on the date the assets were realised |
| Third | The balance to the defaulter |
A dispute over the second adjustment is determined by the Tax Recovery Officer. Sub-rule (9) then bars the civil court: every question between the officer and the defaulter or their representatives on execution, discharge or satisfaction of a certificate, or on confirmation or setting aside of a sale, is decided not by suit but by order of the Tax Recovery Officer — except that a suit lies on the ground of fraud.
Sub-rule (7) adds a related bar: no suit lies against a person claiming title under a certified purchase on the ground that the purchase was made on behalf of the plaintiff. It does not bar a suit for a declaration that the purchaser's name was inserted fraudulently or without the real purchaser's consent, nor a third person's right to proceed against the property as liable to satisfy a claim against the real owner.
Rule 225 recovery exemptions and third-party objections
Sub-rule (10): property exempt under the Code of Civil Procedure, 1908 from attachment and sale in execution of a civil decree is exempt from a rule 225 recovery too, and the Tax Recovery Officer's decision on what qualifies is conclusive.
Sub-rule (11) governs a third party's claim or objection that property is not liable to attachment or sale. The officer shall investigate, unless he considers the claim designedly or unnecessarily delayed. The claimant must show an interest in or possession of the property at the date of service of the notice for immovable property, or at the date of attachment for movable property. If satisfied the property was not the defaulter's on that date, the officer releases it wholly or in part; if satisfied it was, he disallows the claim. Either way the losing party may sue in a civil court to establish his right, and subject to that suit the order is conclusive.
The rule 225 recovery safeguards in sub-rules (12) to (20)
| Sub-rule | Provision |
|---|---|
| (12) | Attachment deemed withdrawn where the amount with costs and expenses is paid, or the certificate is cancelled; for immovable property the withdrawal is proclaimed at the defaulter's expense if he wishes |
| (13) | Attachment and sale may be made by such persons as the Tax Recovery Officer directs from time to time |
| (14) | A defaulting purchaser is answerable for the deficiency on resale and its expenses — but an application must be filed within fifteen days from the date of resale |
| (15) | Sale may be adjourned; for immovable property adjourned beyond one calendar month a fresh proclamation is required unless waived; every sale is stopped if arrears and costs are tendered before the lot is knocked down |
| (16) | After the sub-rule (2) notice the defaulter cannot mortgage, charge, lease or otherwise deal with his property except with permission, and no civil court may issue process against it; after attachment, private transfer or payment contrary to the attachment is void |
| (17) | No officer with a duty in connection with the sale may bid for or acquire any interest, directly or indirectly |
| (18) | No sale on a Sunday, a general holiday recognised by the State Government, or a notified local holiday for the area |
| (19) | Police assistance may be requisitioned from the nearest police station, which shall depute sufficient officers |
| (20) | Functions may be entrusted, with the previous approval of the Joint Commissioner, to an officer not below the rank of Inspector of Income-tax, who is then deemed a Tax Recovery Officer for them |
The prohibition on dealing with property does not wait for attachment. It bites from service of the sub-rule (2) notice, and it covers mortgage, charge, lease or otherwise deal with any property belonging to him — all of it, not merely the property the officer has in view. A defaulter who sells an asset during the fifteen-day window without permission has made a transfer the department can disregard, and a buyer from him takes nothing as against the attachment. Anyone dealing with a taxpayer known to be in recovery should ask whether a certificate notice has been served.
Compliance checklist
- Check the date of service of the sub-rule (2) notice — the fifteen days and the sub-rule (16) freeze both run from it.
- Where an early attachment is made, ask for the reasons recorded in writing under sub-rule (3)(b).
- Consider furnishing security under sub-rule (3)(c) to have the attachment cancelled.
- Do not assume rule 225 recovery proceeds property-first — all four modes are available together.
- Test any attached item against the Code of Civil Procedure exemptions.
- File a third-party claim promptly; delay is itself a ground to refuse investigation.
- Prove interest or possession as at the notice date or attachment date, whichever applies.
- Watch the second adjustment of proceeds and dispute it before the Tax Recovery Officer if other demands are wrongly included.
Common mistakes
- Dealing with property during the notice period, which sub-rule (16) prohibits.
- Bidding at auction on the assumption that the property is bought clean, when only the defaulter's interest passes.
- Filing a civil suit on a rule 225 recovery execution question that is not framed as fraud.
- Delaying a third-party objection and losing the right to an investigation.
- Missing the fifteen-day window to proceed against a defaulting purchaser after resale.
- Assuming arrest requires property remedies to be exhausted first.
Which year this governs
The Income-tax Rules, 2026 are made under the Income-tax Act, 2025. Rule 225 has no single 1962 rule parallel — it corresponds to the Second Schedule of the Income-tax Act, 1961. Verify the current text before acting on a live recovery.