CBDT Removes Arrest & Detention from Tax Recovery Rules; Extends Registration Deadline for Valuers
The TAX Update
The Central Board of Direct Taxes (CBDT) has introduced important changes to the Income-tax Rules, 2026, covering tax recovery proceedings, registration of valuers and authorised income-tax practitioners, and the information required from professionals seeking registration.
The amendments are particularly significant because the CBDT has removed the provision relating to arrest and detention of a person from the prescribed tax-recovery mechanism.
No Arrest or Detention for Recovery of Tax Arrears
The CBDT, through a notification issued on 17 September 2026, has amended Rule 225 of the Income-tax Rules, 2026, which deals with recovery of tax arrears.
The amendment removes the provision referring to the power to arrest and detain a person as part of the recovery process.
In practical terms, recovery of outstanding tax demand will continue through the prescribed recovery mechanisms, including attachment and sale of assets and other properties, rather than through arrest and detention under the deleted provision.
The amendment also deletes certain related sub-rules in Rule 225 and has been given retrospective effect from 1 April 2026.
This brings the rule position in line with the framework introduced by the Finance Act, 2026.
Recovery Focus Shifts to Assets
The amendment is important from a practical perspective for taxpayers facing recovery proceedings.
The tax recovery framework continues to provide mechanisms for enforcing outstanding demands. However, the specific reference to arrest and detention has now been removed from Rule 225.
Thus, the focus of the prescribed recovery process remains on financial and material assets, including attachment and sale of property and other recoverable assets in accordance with law.
Taxpayers should therefore distinguish between recovery of tax arrears and other proceedings under the Income-tax law where separate consequences may apply.
Six-Month Extension for Valuers and Authorised Income-tax Practitioners
The CBDT has also extended the deadline for registration under Rules 246 and 256 of the Income-tax Rules, 2026.
The earlier deadline of 30 September 2026 has now been extended by six months to 31 March 2027.
The extension provides additional time to eligible valuers and authorised income-tax practitioners to complete the registration process under the new Income-tax framework.
Revised Form No. 169 for Valuers
Another important change relates to the registration of valuers.
The CBDT has substituted Form No. 169, which is the application form for registration as a valuer under Section 514 of the Income-tax Act, 2025.
The revised form requires applicants to provide more detailed information about their professional background and valuation experience.
Among other things, the applicant is required to furnish details regarding:
1. Class of assets for which registration is sought;
2. Educational qualifications;
3. Professional experience and former employment; and
4. Details of assets valued or works executed during the preceding three years.
The revised form therefore seeks substantially more information about the applicant’s qualifications and practical experience before registration is granted.
Separate Application for Each Class of Asset
The revised framework also requires registration to be considered with reference to the class of asset for which valuation services are proposed to be provided.
The prescribed application carries a ₹10,000 fee, while persons already registered under the Wealth-tax Act, 1957 are exempt from payment of this fee, as stated in the amended provisions.
What Does This Mean?
The latest amendments reflect three important developments under the new income-tax framework:
First, the specific provision for arrest and detention has been removed from the tax-recovery rules.
Second, professionals covered by Rules 246 and 256 have been given six additional months, with the registration deadline moving from 30 September 2026 to 31 March 2027.
Third, the revised Form No. 169 places greater emphasis on the qualifications, experience and actual professional track record of persons seeking registration as valuers.
For taxpayers, the removal of arrest and detention from Rule 225 is particularly noteworthy. For professionals, however, the extended registration window and revised disclosure requirements deserve immediate attention.
The message is simple: tax recovery continues—but the rules governing the manner of recovery and professional registration have now been recalibrated under the new Income-tax framework.
