Chapter XXII - Offences and Prosecution
Section 475
Section 475: removal, concealment, transfer or delivery of property to prevent tax recovery
Section 475 is an offence in Chapter XXII (Offences and Prosecution) of the Income-tax Act, 2025. It covers fraudulently removing, concealing, transferring or delivering property or an interest in it with the intent to prevent it from being taken in execution of a recovery certificate drawn under Section 413.
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Need advice on Section 475?
This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
Whoever, fraudulently removes, conceals, transfers or delivers to any person, any property or any interest therein, with the intent to prevent such property or interest therein from being taken in execution of a certificate drawn under section 413, shall be punishable with simple imprisonment for a term up to two years and with fine.
Introduction
Section 475 criminalises fraudulent dealing with property to prevent its use in executing a recovery certificate under section 413. The act must involve the specified intent to frustrate recovery.
Key takeaways
Fraudulent conduct
Removal, concealment, transfer or delivery of property or an interest can be covered.
Recovery link
The conduct must be intended to prevent execution of a section 413 certificate.
Current punishment
The amended text states simple imprisonment up to two years and fine.
What Section 475 says
"Whoever, fraudulently removes, conceals, transfers or delivers to any person, any property or any interest therein, with the intent to prevent such property or interest therein from being taken in execution of a certificate drawn under section 413, shall be punishable with simple imprisonment for a term up to two years and with fine."
The Finance Act, 2026 substituted the present punishment - simple imprisonment for a term up to two years and with fine - for the earlier rigorous-imprisonment wording, with effect from 1 April 2026.
What the offence requires
The offence requires a fraudulent act - removing, concealing, transferring or delivering property or an interest in property - done with the specific intent of preventing that property from being taken in execution of a certificate drawn under section 413 (the tax recovery certificate provision).
Applying Section 475 in practice
Elements. The offence requires fraudulent removal, concealment, transfer or delivery of property or an interest in it, with intent to prevent execution of a certificate drawn under section 413. An ordinary sale is not, without those elements, described by this offence. Checklist: recovery certificate, property interest, transaction timeline, consideration and evidence bearing on fraudulent intent. Hypothetical: Transferring an asset to a relative after a certificate while hiding beneficial control could raise the statutory question; the facts and intent must be proved. The maximum is two years' simple imprisonment plus fine.
Step-by-step flow for applying Section 475
- 1
Has a certificate been drawn up under section 413?
Under section 413, the Tax Recovery Officer draws up a certificate of arrears and recovers them by attaching and selling property or appointing a receiver.
- No: Section 475 does not apply.
- Yes: Go to the next step.
- 2
Did the person remove, conceal, transfer or deliver any property, or any interest in property, to any person?
- No: No offence.
- Yes: Go to the next step.
- 3
Was it done fraudulently, with intent to prevent the property being taken in execution of the certificate?
Both fraud and that intent are needed. An ordinary transaction with no such intent is not covered.
- No: No offence under Section 475.
- Yes: Go to the next step.
- 4
Punishment on conviction
Simple imprisonment up to two years and fine. The section says "whoever", so it is not limited to the assessee.
Practical checklist
Do
- Identify the section 413 recovery certificate and the property or interest said to be within its execution.
- Review evidence of both the alleged property transaction and the specific intent to prevent execution.
Avoid
- Do not treat every transfer during recovery as this offence without the stated fraudulent act and intent.
Illustrative example
Worked example: shifting a flat to a relative
Hypothetical facts (illustration only, not a real taxpayer): The Tax Recovery Officer draws up a certificate under section 413 against Mr. Rao for arrears. Two weeks later, Mr. Rao transfers his only flat to his brother for no payment. Messages between them show the purpose was to keep it out of attachment. The facts are assumed.
Certificate
A certificate under section 413 exists, so the flat could be taken in execution of it.
Act
Transferring the flat to his brother is a transfer of property to another person.
Intent
The messages point to fraud and an intent to prevent the flat being taken in execution, which is what Section 475 requires.
Others involved
Section 475 applies to "whoever" does the act. Whether the brother is also liable depends on his own role and intent.
Outcome
- Mr. Rao faces prosecution under Section 475: on conviction, simple imprisonment up to two years and fine.
- Section 475 is a criminal provision. It does not by itself undo the transfer.
Frequently asked questions
What is the punishment under Section 475?
Simple imprisonment for a term up to two years, and with fine, as currently worded following the Finance Act, 2026 amendment effective 1 April 2026.
What conduct does Section 475 punish?
Fraudulently removing, concealing, transferring or delivering property (or an interest in it) to any person, with the intent to prevent that property from being taken in execution of a tax recovery certificate drawn under section 413.
Need help applying this provision to your situation?
Talk to our tax team about a tax recovery matterLast updated 2026-10-10