Sections 221 to 223 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.
Chapter VII of Part IV deals with the money of the Insolvency and Bankruptcy Board of India (the Board). Section 221 allows grants from the Central Government. Section 222 creates the Fund of the Insolvency and Bankruptcy Board, lists what is credited to it and what it is applied for. Section 223 requires proper accounts and an annual statement, and makes the Comptroller and Auditor-General of India the auditor. This article follows the IBBI consolidated text of the Code amended up to 12 August 2021.
Section 221: after due appropriation by Parliament, the Central Government may make grants to the Board "of such sums of money as that Government may think fit". Section 222: a Fund is constituted, credited with grants, fees and charges, sums from other sources and other funds, and applied to salaries, the expenses of the Board's functions under section 196, objects authorised by the Code, and purposes prescribed. Section 223: accounts are maintained, audited by the Comptroller and Auditor-General of India, and forwarded annually to the Central Government, which lays them before each House of Parliament.
Section 221: grants by the Central Government
"The Central Government may, after due appropriation made by Parliament by law in this behalf, make to the Board grants of such sums of money as that Government may think fit for being utilised for the purposes of this Code."
Reading the sentence in parts: the power is the Central Government's ("may"); it depends on "due appropriation made by Parliament by law"; the amount is whatever "that Government may think fit"; and the use is "for the purposes of this Code". The section prints no minimum, no ceiling and no schedule of payment.
Section 222: the Fund of the Board
Sub-section (1) says "There shall be constituted a Fund to be called the Fund of the Insolvency and Bankruptcy Board" and lists what is credited to it:
| Clause | Credit to the Fund (as printed) |
|---|---|
| (a) | all grants, fees and charges received by the Board under this Code |
| (b) | all sums received by the Board from such other sources as may be decided upon by the Central Government |
| (c) | such other funds as may be specified by the Board or prescribed by the Central Government |
Clause (a) links back to section 221 (grants) and to the many provisions of the Code under which the Board receives fees. Clause (c) is open-ended: the "other funds" are those "specified by the Board or prescribed by the Central Government". Section 239(2)(zf) lets the Central Government's rules fix "the other funds under clause (c) of sub-section (1) of section 222", and section 240(2)(zzzc) lets the Board's regulations cover "the other funds of clause (c) of sub-section (1) of section 222". What has been prescribed or specified is not in the texts consulted.
Sub-section (2) says what the Fund "shall be applied for meeting":
- (a) "the salaries, allowances and other remuneration of the members, officers and other employees of the Board";
- (b) "the expenses of the Board in the discharge of its functions under section 196";
- (c) "the expenses on objects and for purposes authorised by this Code"; and
- (d) "such other purposes as may be prescribed".
A printing point: clause (c) ends with a full stop although clause (d) follows. The text is quoted as printed. Section 239(2)(zg) is the matching rule-making power for clause (d): "the other purposes for which the fund shall be applied under clause (d) of sub-section (2) of section 222".
Two things the section does not say: it does not name a bank or an account, and it does not say what happens to a surplus at year end. Do not assume rules the text omits. If a reader is concerned with how regulator funding bears on a particular matter, a legal consultation can sort out what the text does and does not provide.
The Fund of the Board is a different thing from the Insolvency and Bankruptcy Fund of section 224 (see article 131). The latter is for the purposes of insolvency resolution, liquidation and bankruptcy; the former is the Board's own fund.
Section 223: accounts and audit
(1) Accounts. "The Board shall maintain proper accounts and other relevant records and prepare an annual statement of accounts in such form as may be prescribed by the Central Government in consultation with the Comptroller and Auditor-General of India." Section 239(2)(zh) provides for rules on "the form in which annual statement of accounts shall be prepared under sub-section (1) of section 223".
(2) Audit. "The accounts of the Board shall be audited by the Comptroller and Auditor-General of India at such intervals as may be specified by him and any expenditure incurred in connection with such audit shall be payable by the Board to the Comptroller and Auditor-General of India."
(3) Audit powers. The Comptroller and Auditor-General, and any person appointed by him, have "the same rights and privileges and authority in connection with such audit as the Comptroller and Auditor-General generally has in connection with the audit of the Government accounts", including the right "to demand the production of books, accounts, connected vouchers and other documents and papers and to inspect any of the offices of the Board".
(4) Reporting. The accounts, as certified by the Comptroller and Auditor-General or any person he appoints, "together with the audit report thereon shall be forwarded annually to the Central Government and that Government shall cause the same to be laid before each House of Parliament".
Example (invented). The Board's accounts for a financial year are closed and an annual statement is prepared in the prescribed form. The Comptroller and Auditor-General's audit team asks for vouchers and visits an office of the Board; sub-section (3) gives it the right to do both. The certified accounts and audit report go to the Central Government, which has them laid before each House of Parliament. The Board bears the cost of the audit.
| Step | Provision | Who | What the text says |
|---|---|---|---|
| Grant | Section 221 | Central Government | May make grants after due appropriation by Parliament |
| Fund | Section 222 | Board | Credits (grants, fees, charges, other sums) and applications |
| Accounts | Section 223(1) | Board | Proper accounts and annual statement in the prescribed form |
| Audit | Section 223(2), (3) | Comptroller and Auditor-General | Audits at intervals he specifies; Board pays the cost |
| Laying | Section 223(4) | Central Government | Lays certified accounts and audit report before each House |
Section 229, which deals with the Board's annual report and its laying before Parliament, is explained in article 133.
The Amendment Act, 2026
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026) does not amend sections 221, 222 or 223. It amends section 196, which section 222(2)(b) mentions, and that section is explained elsewhere. The Amendment Act, 2026 comes into force on the date or dates the Central Government notifies; the notification is not in the texts consulted, so check whether this change has been notified.
Amendments and notifications made after 12 August 2021, other than the Amendment Act, 2026, are not in the texts consulted and should be checked.
Need help with regulator funding or accounting questions under the Code?
Most readers will meet these sections only in passing, when reading about the Board's finances or its supervision by Parliament. If your question is how they interact with a specific matter, our team can read the provisions with you in a legal consultation and tell you what the text does and does not say.
Key takeaways
- The Central Government may make grants to the Board, after due appropriation by Parliament.
- The Fund of the Board is credited with grants, fees and charges, sums from other sources and other prescribed or specified funds.
- The Fund is applied to salaries, the expenses of the Board's section 196 functions, objects authorised by the Code and prescribed purposes.
- The Comptroller and Auditor-General of India audits the Board's accounts and has the right to demand documents and inspect offices.
- The certified accounts and audit report go to the Central Government and are laid before each House of Parliament.
Read next
- Section 224: the Insolvency and Bankruptcy Fund
- Sections 228 to 230: budget, annual report and delegation by the Board
- Sections 219 and 220: show cause notice and the disciplinary committee of the Board
- IBBI establishment, constitution and powers under sections 188 to 198
Disclaimer: Based on the IBBI consolidated text of the Insolvency and Bankruptcy Code, 2016 amended up to 12 August 2021 and on the Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026), which comes into force on the date or dates notified by the Central Government, as consulted on 2 October 2026. It explains the words of the statute only; commencement notifications, other amendments made after 12 August 2021, notified thresholds, the rules and IBBI regulations, and the way tribunals and courts apply these sections should be checked. This article is general information, not legal advice; check the official text before acting.