What is Tax Recovery?

Tax recovery refers to the process by which tax authorities recover unpaid taxes, interest, or penalties from taxpayers. This process is initiated when a taxpayer fails to pay the demanded amount within the specified time frame. Recovery methods include:

1.Attachment of Bank Accounts: Freezing the taxpayer’s bank accounts to recover dues.

2.Attachment of Property: Seizing and auctioning the taxpayer’s property.

3.Garnishee Orders: Directing third parties (e.g., debtors) to pay the taxpayer’s dues to the tax department.

4.Arrest and Detention: In extreme cases, tax authorities may arrest the taxpayer for non-payment of dues.

Grounds for Tax Recovery

1.Unpaid Tax Demands: Failure to pay taxes assessed by the tax department.

2.Non-Filing of Returns: Failure to file income tax, GST, or other returns.

3.Disallowance of Claims: Disallowance of deductions, exemptions, or input tax credits.

4.Penalties and Interest: Non-payment of penalties or interest levied by tax authorities.