Income Tax Act

Official PDF pages 581–585

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Act to have effect pending legislative provision for charge of tax.
530.   If on the 1st April in any tax year, provision has not yet been made by a Central
Act for the charging of income-tax for that tax year, this Act shall neverthe -
less have effect until such provision is so made, as if the provision in force in the
preceding tax year or the provision proposed in the Bill then before Parliament,
whichever is more favourable to the assessee, were actually in force.
Power to rescind exemption in relation to certain Union territories already
granted under section 294A of the Income-tax Act, 1961.
531.   Where the Central Government considers it necessary or expedient so to do
may, by general or special order, rescind an exemption, reduction in rate or
other modification in respect of income-tax or super-tax in favour of any assessee or
class of assessees or in regard to the whole or any part of the income of any assessee
or class of assessees, made as per the provisions of section 294A of the Income-tax
Act, 1961 (43 of 1961).
Power to frame schemes.
532 .   (1) The Central Government may, by notification, make a scheme
43a  
for any
of the purposes of this Act, so as to impart greater efficiency, transparency
and accountability by—
( a )   eliminating the interface with the assessee or any other person to the
extent technologically feasible;
( b )   optimising utilisation of the resources through economies of scale and
functional specialisation.
(2) The Central Government may, for the purposes of giving effect to the scheme
made under sub-section (1), by notification, direct that any of the provisions of this
Act shall not apply or shall apply with such exceptions, modifications and adapta -
tions as specified in the notification.
(3) Where a scheme has been notified under the provisions of the Income-tax Act,
1961 (43 of 1961) with a view to eliminating the interface with the assessee or any
other person, the Central Government may, by notification, amend or modify the
said scheme as per the provisions of sub-section (1), and the provisions of sub-sec -
tion (2) shall apply accordingly.
(4) Every notification issued under sub-sections (1), (2) and (3) shall, as soon as
may be after the notification is issued, be laid before each House of Parliament.
Power to make rules.
533 .   (1) The Board may, subject to the control of the Central Government, by
notification, make rules for carrying out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power,
such rules may provide for all or any of the following matters:—
( a )   the ascertainment and determination of any class of income;
( b )   the manner in which and the procedure by which the income shall be
arrived at in the case of—
( i )   income derived in part from agriculture and in part from business;
( ii )   persons residing outside India;

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( iii )   operations carried out in India by a non-resident;
( iv )   transactions or activities of a non-resident;
( v )   an individual who is liable to be assessed under section 99(3) and
(4);
( c )   the determination of the value of any perquisite chargeable to tax under
this Act in such manner and on such basis as appears to the Board to be
proper and reasonable;
( d )   the percentage on the written down value which may be allowed as de -
preciation for buildings, machinery, plant or furniture;
( e )   the matters specified in section 62;
( f )   the conditions or limitations subject to which any payment of rent made
by an assessee shall be deducted under section 134;
( g )   the matters specified in Chapter XI;
( h )   the time within which any person may apply for the allotment of a
Permanent Account Number, the form and the manner in which such
application may be made and the particulars which such application shall
contain and the transactions with respect to which Permanent Account
Number shall be quoted on documents relating to such transactions
under section 262;
( i )   the documents, statements, receipts, certificates or audited reports which
may not be furnished along with the return but shall be produced before
the Assessing Officer on demand under section 263(2)( a );
( j )   the class or classes of persons who shall be required to furnish the return
of income in electronic form; the form and the manner of furnishing
the said return in electronic form; documents, statements, receipts,
certificates or reports which shall not be furnished with the return in
electronic form and the computer resource or electronic record to which
such return may be transmitted under section 263(2)( a );
( k )   the cases, the nature and value of assets, the limits and heads of expendi -
ture and the outgoings, which are required to be prescribed under section
263(2)( b );
( l )   the form of the report of audit or inventory valuation and the particulars
which such report shall contain under section 268(5);
( m )   remuneration of Chairperson and members of the Approving Panel
under section 274(21) and procedure and manner for constitution of,
functioning and disposal of references by, the Approving Panel under
section 274(24);
( n )   the form and manner in which the information relating to payment of
any sum may be furnished under section 397(3)( d );
( o )   the authority to be prescribed for any of the purposes of this Act;
( p )   the procedure for giving effect to any agreement for the granting of relief
in respect of double taxation or for the avoidance of double taxation
entered into by the Central Government under this Act;

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( q )   the procedure for granting of relief or deduction, of any income-tax paid
in any country or specified territory outside India, under section 159 or
160, against the income-tax payable under this Act;
( r )   the form and manner in which any application, claim, return or infor -
mation may be made or furnished and the fees that may be levied in
respect of any application or claim;
( s )   the manner in which any document required to be filed under this Act
may be verified;
( t )   the procedure to be followed on applications for refunds;
( u )   the procedure for calculating interest payable by assessees or by the
Government to assessees under this Act, including the rounding off
of periods when a fraction of a month is involved, and specifying the
circumstances under which and the extent to which petty amounts of
interest payable by assessees may be ignored;
( v )   the regulation of any matter for which provision is made in section 420;
( w )   the form and manner in which any appeal or cross-objection may be
filed under this Act, the fee payable in respect thereof and the manner
in which intimation referred to in section 358(3)( b ) may be served;
( x )   the circumstances, conditions and the manner in which, the Joint
Commissioner (Appeals) or the Commissioner (Appeals) may permit an
appellant to produce evidence which he did not produce or which he
was not allowed to produce before the Assessing Officer;
( y )   the form in which the statement under section 507 shall be delivered to
the Assessing Officer;
( z )   the maintenance of a register of persons other than legal practitioners
or accountants practising before income-tax authorities and for the con -
stitution of and the procedure to be followed by the authority referred
to in section 515(5);
( za )   the issue of certificate verifying the payment of tax by assessees;
( zb )   any other matter which by this Act is to be, or may be, prescribed.
(3) In cases falling under sub-section (2)( b ), where the income liable to tax cannot
be definitely ascertained, or can be ascertained only with an amount of trouble and
expense to the assessee, which is unreasonable, the rules made under this section
may—
( a )   prescribe methods by which an estimate of such income may be made;
and
( b )   in cases of income derived in part from agriculture and in part from
business, specify the proportion of the income which shall be deemed
to be income liable to tax,
and an assessment based on such estimate or proportion shall be deemed to be
duly made as per this Act.
(4) The power to make rules conferred by this section shall include the power to
give retrospective effect, from a date not earlier than the date of commencement of
this Act, to the rules or any of them and, unless the contrary is permitted (whether

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expressly or by necessary implication), no retrospective effect shall be given to any
rule so as to prejudicially affect the interests of assessees.
Laying before Parliament.
534 .   The Central Government shall cause––
( a )   every rule made under this Act;
( b )   rules of procedure framed by the Appellate Tribunal under section 364;
or
( c )   every notification issued under sections 263(3) and 264 and Chapter
XIII-G,
to be laid, as soon as may be after it is made or issued, before each House of Parlia -
ment while it is in session for a total period of thirty days which may be comprised
in one session or in two or more successive sessions, and if, before the expiry of
the session immediately following the session or the successive sessions aforesaid,
both Houses agree in making any modification in such rule, or notification or both
Houses agree that the rule, should not be made or the notification should not be
issued, the rule or notification shall thereafter have effect only in such modified
form or be of no effect, as the case may be; so, however, that any such modification
or annulment shall be without prejudice to the validity of anything previously done
under that rule or notification.
Removal of difficulties.
535 .   (1) If any difficulty arises in giving effect to the provisions of this Act, the
Central Government may, by general or special order, do anything not incon -
sistent with such provisions which appears to it to be necessary or expedient for
the purpose of removing the difficulty.
(2) In particular, and without prejudice to the generality of the foregoing power, any
order referred to in sub-section (1) may provide for the adaptations or modifications
subject to which the Income-tax Act, 1961 (43 of 1961) shall apply in relation to the
assessments for the tax year ending on the 31st March, 2026, or any earlier tax year.
(3) No order under sub-section (1) shall be made after the expiration of three years
from the 1st April, 2026.
(4) Every order made under this section shall be laid, as soon as may be, after it is
made, before each House of Parliament.
Repeal and savings.
536 .   (1) The Income-tax Act, 1961 (43 of 1961) is hereby repealed.
(2) Irrespective of the repeal of the Income-tax Act, 1961 (43 of 1961) (herein referred
to as the repealed Income-tax Act), and subject to  
33
[ sub-section (4) ] —
( a )   nothing shall affect the previous operation of the repealed Income-tax
Act and orders or anything duly done or suffered thereunder; or
33.   Substituted for “sub-section (3)” by the Finance Act, 2026, w.e.f.   1-4-2026 .

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( b )   nothing shall affect any right, privilege, obligation or liability acquired,
accrued or incurred under the repealed Income-tax Act or orders under
such repealed Act;
( c )   the provisions of the repealed Income-tax Act shall continue to apply to
any proceeding pending on the date of commencement of this Act and
to any proceedings initiated on or after the 1st April, 2026 (including
notices, assessment, reassessment, recomputation, rectification, penal -
ty, reference, revision and appeals) in respect of any tax year beginning
before the 1st April, 2026 and such proceedings shall be carried out as
per the procedure specified in the repealed Income-tax Act;
( d )   any proceeding for the imposition of a penalty in respect of any tax
year beginning before the 1st April, 2026, may be initiated and any such
penalty may be imposed under the repealed Income-tax Act, as if this
Act had not been enacted;
( e )   any proceeding pending on the commencement of this Act before any
income-tax authority or any other authority constituted under the repealed
Income-tax Act, Appellate Tribunal, or any court, by way of application,
appeal, reference or revision or by any other means, shall be continued
and disposed of as if this Act had not been enacted;
( f )   any election or declaration made, or option exercised, by an assessee
under any provision of the repealed Income-tax Act and in force imme -
diately before the commencement of this Act shall be deemed to have
been an election or declaration made, or option exercised, under the
corresponding provision of this Act;
34
[ ( g )   where in respect of any proceeding relating to any tax year beginning before
the 1st April, 2026,—
( i )   a refund falls due on or after such date; or
( ii )   default is made on or after such date, in the payment of any sum due
under such proceeding,
the provisions of the repealed Income-tax Act, relating to the interest pay -
able by the Central Government on refunds or the interest payable by the
assessee for default, shall apply for the period on or after such date, subject
to the effect that—
34.   Substituted by the Finance Act, 2026, w.e.f.   1-4-2026 . Prior to its substitution, clause ( g ) read
as under :
“( g )   where in respect of any proceeding relating to any tax year beginning before the 1st
April, 2026,—
( i )   a refund falls due after commencement of this Act; or
( ii )   default is made after such commencement in the payment of any sum due
under such proceeding,
the provisions of this Act, relating to interest payable by the Central Government on
refunds and interest payable by the assessee for default, shall apply for the period
after the commencement of this Act;”