Income-tax Act, 1961Section 179
- Directors jointly and severally liable for unrecoverable tax of a private company
- Unless non-recovery not due to gross neglect, misfeasance or breach of duty
Applies to FY 2025-26 (AY 2026-27) and earlier years.
IT Act 1961 → 2025 / Section 179
Returns & assessmentSection 179 → Section 323
Liability of directors of a private company for unpaid tax
Section 179 of the old Income-tax Act, 1961 · new section 323 under the Income-tax Act, 2025
New reference Section 323
Income-tax Act, 2025Section 323
- Same, now section 323
- 'Tax due' includes penalty, interest, fees
Applies from tax year 2026-27 (from 1 April 2026).
What changed
Renumbered.
Practice notes
- Applies also to companies that were private during the relevant year.
Frequently asked
What is section 179 called in the new Income Tax Act 2025?
Section 323: directors of a private company are personally liable for unrecoverable tax unless they prove no gross neglect.
What is section 179 called in the new Income-tax Act, 2025?
Section 179 of the Income-tax Act, 1961 corresponds to Section 323 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).
What changed in section 179 under the new Income Tax Act?
Renumbered.
Is section 179 still applicable for FY 2025-26?
Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 179 of the 1961 Act. Section 323 of the 2025 Act applies from tax year 2026-27.