Voidable Transfers in Tax Law : Clause 499 of the Income Tax Bill, 2025 Vs. Section 281 of the Income-tax Act, 1961

Voidable asset transfers: transfers during tax proceedings can be voided against tax claims, with exceptions for bona fide transferees.

Clause 499 renders charges or transfers of assets void against tax claims when effected during proceedings or after completion but before service of recovery notice, covering transfers by sale, mortgage, gift, exchange or any other mode and an expansive list of assets including virtual digital assets. Exceptions protect transfers made for adequate consideration without notice and those with prior permission of the Assessing Officer, while stock in trade is excluded; the clause updates procedural references and preserves core safeguards from the predecessor provision.