Section 281 of Income Tax Act 1961

[Bijay Shrestha]

A person is taking loan from outsiders for which he wants create charge on his House or he wants to gift his house to his friend.

He does not have any dues/proceedings pending to Income Tax and also has not received any demand from Income Tax.

Now my query is - Is he required to get certificate from Income Tax department u/s 281 before such creation of charge or gift as the case may be?

Please kindly suggest.

[DR.MARIAPPAN GOVINDARAJAN]

Section 281 is applicable to cases where the amount of tax or other sum payable or likely to be payable exceeds five thousand rupees and the assets charged or transferred exceed ten thousand rupees in value.

AI Summary

Certificate requirement under section 281 applies only where tax liability and asset value exceed statutory thresholds for charges and gifts. Section 281 requires a departmental certificate before creating a charge on or transferring (gifting) immovable property only where the tax payable (or likely payable) and the value of the asset charged or transferred exceed the statutory thresholds; below those thresholds the certification requirement does not apply.