Section 179 → Section 195
Liability of directors of private company
Quick Answer
Section 179 of the Income Tax Act, 1961 (Liability of directors of private company) corresponds to Section 195 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 179
Section 179 of the 1961 Act sets out the rules on liability of directors of private company. Directors of a private company are personally liable for the company's tax dues if it cannot be recovered from the company.
Under the Income-tax Act, 2025 (effective 1st April 2026), Section 179 is retained and renumbered as Section 195 of the Income-tax Act, 2025. Retained. Piercing the corporate veil for tax recovery.
The transition impact on Section 179 is assessed as High. Significant personal risk for directors of private limited companies.
Sec 179
Provision Summary
Directors of a private company are personally liable for the company's tax dues if it cannot be recovered from the company.
Sec 195
Provision Summary
Retained. Piercing the corporate veil for tax recovery.
Key Changes & Highlights
- Burden of proof is on the Director to show the non-recovery was not due to their neglect or breach of duty.
Frequently Asked Questions
Which subject does Section 179 of the 1961 Act cover?
Section 179 of the Income Tax Act, 1961 covers liability of directors of private company. Directors of a private company are personally liable for the company's tax dues if it cannot be recovered from the company.
What is the new section number for Section 179 under the Income-tax Act, 2025?
Section 179 of the Income Tax Act, 1961 maps to Section 195 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. Piercing the corporate veil for tax recovery.
How does the Income-tax Act, 2025 affect Section 179 in practice?
The transition impact for Section 179 is rated High. Significant personal risk for directors of private limited companies.
What is new about Section 179 under the Income-tax Act, 2025?
Burden of proof is on the Director to show the non-recovery was not due to their neglect or breach of duty. These points are specific to Section 179 (Liability of directors of private company).
Disclaimer: This mapping of Section 179 (Liability of directors of private company) to Section 195 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 179 is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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