Section 281 → Section 401
Certain transfers to be void
Quick Answer
Section 281 of the Income Tax Act, 1961 (Certain transfers to be void) corresponds to Section 401 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 281
In the 1961 statute, Section 281 deals with certain transfers to be void. If a taxpayer sells an asset while a tax proceeding is pending, the sale is void unless done with the department's permission.
The new code maps this to Section 401: the provision is retained and renumbered as Section 401 of the Income-tax Act, 2025, applying from 1st April 2026. Retained. Protects the government's right to recover tax from the assets of the assessee.
On the ground, changes to Section 281 carry a High impact. Crucial for property buyers to check 'Tax Clearance' of the seller.
Sec 281
Provision Summary
If a taxpayer sells an asset while a tax proceeding is pending, the sale is void unless done with the department's permission.
Sec 401
Provision Summary
Retained. Protects the government's right to recover tax from the assets of the assessee.
Key Changes & Highlights
- Does not apply if the asset is transferred for adequate consideration without notice of pendency.
Frequently Asked Questions
What does Section 281 of the Income Tax Act 1961 deal with?
Section 281 of the Income Tax Act, 1961 covers certain transfers to be void. If a taxpayer sells an asset while a tax proceeding is pending, the sale is void unless done with the department's permission.
Where does Section 281 of the ITA 1961 go under the Income-tax Act, 2025?
Section 281 of the Income Tax Act, 1961 maps to Section 401 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. Protects the government's right to recover tax from the assets of the assessee.
Why does the change to Section 281 matter for taxpayers?
The transition impact for Section 281 is rated High. Crucial for property buyers to check 'Tax Clearance' of the seller.
What are the key changes to Section 281 under the Income-tax Act, 2025?
Does not apply if the asset is transferred for adequate consideration without notice of pendency. These points are specific to Section 281 (Certain transfers to be void).
Disclaimer: This mapping of Section 281 (Certain transfers to be void) to Section 401 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 281 is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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