Rule 225 Sale explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
A rule 225 sale of attached movable property under the Income-tax Rules, 2026 needs a proclamation in the language of the district, a fifteen-day wait and a public auction in lots that stops the moment the arrears are covered.
The rule 225 sale order and the proclamation
Sub-rule (37): the Tax Recovery Officer may direct that any attached movable property, or such portion as may seem necessary to satisfy the certificate, shall be sold. The proportionality that governed the attachment under sub-rule (34) governs the sale too — a rule 225 sale is to be of so much as is necessary, not of everything seized.
Sub-rule (38): on ordering a sale the officer shall issue a proclamation, in the language of the district, of the intended sale, specifying:
- the time and place of sale; and
- whether the sale is subject to confirmation or not.
This is the one item in sub-rule (38) an intending bidder should read first. A movable-property sale under sub-rule (44) becomes absolute on payment of the purchase money — there is no confirmation stage as there is for immovable property. But the proclamation must state whether the particular sale is subject to confirmation or not, and that determines when the buyer's title is settled and from when he bears the risk on the goods.
Sub-rule (39): the proclamation is made by any customary mode — for property seized, in the village, or in the locality of a town or city, where it was seized, and at such other places as the officer directs; for property attached otherwise than by seizure, at such places as he directs. A copy is also affixed in a conspicuous part of his office.
The fifteen-day wait before a rule 225 sale
Sub-rule (40): no rule 225 sale of movable property shall take place until after the expiry of at least fifteen days calculated from the date a copy of the sale proclamation was affixed in the office of the Tax Recovery Officer — subject to two exceptions:
| Exception | Effect |
|---|---|
| The defaulter's consent in writing | The wait may be dispensed with |
| Property subject to speedy and natural decay, or where custody would cost more than its value | The wait does not apply |
Note the clock runs from affixation in the office, not from the proclamation in the locality, and not from the seizure.
Agricultural produce and growing crops
Sub-rule (41): agricultural produce is sold on or near the land where a growing crop grew, or at or near the threshing floor, treading place or fodder-stack where it was deposited — unless the officer directs sale at the nearest place of public resort because the produce is likely to sell to greater advantage there.
Clause (c) adds a protection with a hard edge: where, on the produce being put up for sale, a fair price in the estimation of the person holding the sale is not offered and the owner or his representative applies to postpone to the next day or next market day, the sale shall be postponed — and shall then be completed, whatever price may be offered.
The owner's right in sub-rule (41)(c) is a single adjournment, and it is expensive to misuse. On the resumed day the produce is sold whatever price may be offered — the fair-price test does not apply a second time. Both conditions must also be met to get the postponement at all: the person holding the sale must think the price unfair and the owner must apply. An owner who is unhappy with a price the auctioneer considers fair has no right to postpone.
Sub-rule (42) on growing crops: where the crop admits of being stored but has not been stored, the sale day is fixed so the crop can be made ready for storing first, and the sale is not held until it has been cut or gathered and is ready. Where the crop does not admit of being stored, or can be sold to greater advantage unripe — the rule's own example is green wheat — it may be sold before cutting, and the purchaser may enter on the land to tend, cut or gather it.
The auction
| Sub-rule | Provision |
|---|---|
| (43) | Sale by public auction in one or more lots; if the amount to be realised is satisfied by selling part, the sale is immediately stopped for the remaining lots |
| (44)(a) | The price of each lot is paid at the time of sale, or as soon after as the officer directs; in default the property is forthwith resold |
| (44)(b) | On payment, the officer grants a certificate specifying the property, the price and the purchaser's name, and the sale becomes absolute |
| (44)(c) | Where a share in goods owned with a co-owner is sold and two or more persons, one a co-owner, bid the same sum, the bidding is deemed to be the co-owner's |
Sub-rule (43) is the counterpart of sub-rule (34): the rule 225 sale stops the moment the arrears are covered, so a defaulter with several attached lots keeps whatever is not needed.
Irregularity in a rule 225 sale, brokers and cash
Sub-rule (45): no irregularity in publishing or conducting the sale of movable property vitiates the sale. A person sustaining substantial injury by reason of an irregularity due to another person may sue that person for compensation — or, if that person is the purchaser, for recovery of the specific property and compensation in default of recovery.
Contrast sub-rule (45) with sub-rule (61), which allows an immovable sale to be set aside for material irregularity where substantial injury is shown. For movable property there is no setting aside at all — the sale stands, and the injured party's remedy is a civil suit for compensation against whoever caused the irregularity. The practical consequence is that objections to a rule 225 sale of movables must be raised before the hammer falls; afterwards, the property is gone.
Sub-rule (46): irrespective of anything else in the rule, where the property is a negotiable instrument or a share in a corporation, the Tax Recovery Officer may authorise sale through a broker instead of by public auction. That is the sensible course for listed securities, where an auction would realise less than the market.
Sub-rule (47): where the attached property is current coin or currency notes, the officer may at any time during the attachment direct that they be credited to the Central Government, the amount then being dealt with under the proceeds rule in sub-rule (8) — certificate and costs first, other demands next, balance to the defaulter.
Worked example
| Facts | Position under rule 225 |
|---|---|
| Proclamation affixed in the office on 1 March; sale held 10 March | Too early — fifteen days from affixation |
| Same, but the defaulter consented in writing | Permissible under sub-rule (40) |
| Perishable goods sold three days after seizure | Permissible — the decay exception |
| Proclamation issued only in English in a non-English district | Sub-rule (38) requires the language of the district |
| Three lots attached; arrears covered after the first two | The rule 225 sale stops; the third lot is not sold |
| Buyer of a lot does not pay at the time of sale | The lot is forthwith resold |
| Co-owner and an outsider bid the same amount for a share in goods | The bid is deemed the co-owner's |
| Auctioneer thinks the price for stored grain unfair; owner asks for postponement | Postponed one day, then sold at whatever price |
| Owner alone thinks the price unfair | No right to postpone — both conditions must be met |
| Listed shares attached | May be sold through a broker under sub-rule (46) |
| Defaulter discovers a publication irregularity after the sale | Sale not vitiated; remedy is a civil suit for compensation |
Compliance checklist
- Check the date the proclamation was affixed in the Tax Recovery Officer's office — the fifteen days run from there.
- Read whether the proclamation says the sale is subject to confirmation.
- Confirm the proclamation is in the language of the district.
- Object to any irregularity before the sale — afterwards a movable sale cannot be set aside.
- Insist that the rule 225 sale stops once the arrears and costs are realised.
- For agricultural produce, know that the postponement right is exercisable once.
- For securities, ask the officer to exercise the broker route under sub-rule (46).
- Where cash is seized, track its credit and the sub-rule (8) application of the amount.
Common mistakes
- Counting the fifteen days from the local proclamation rather than from office affixation.
- Reserving objections for an appeal, when sub-rule (45) leaves no power to set the sale aside.
- Assuming a fair-price objection can be repeated after one postponement.
- Letting shares go to auction when a broker sale would realise more.
- Allowing the whole seizure to be sold after the arrears are covered.
- Treating a movable sale as needing confirmation when it becomes absolute on payment.
Which year this governs
The Income-tax Rules, 2026 are made under the Income-tax Act, 2025. Rule 225 corresponds to the Second Schedule of the Income-tax Act, 1961 rather than to any single 1962 rule. Verify the current text before bidding or objecting.