Income Tax Act, 2025 As amended by The Finance Act, 2026

CONTENTS

Comparative Table of Sections of Income Tax Act, 1961 and Income Tax Act, 2025 ................. xxi
Comparative Table of Sections of New Income Tax Act, 2025 and
Income Tax Act, 1961 ....................................................................................................lxxiii
Comparative Table of Clause-wise definition of Section 2 of New Income Tax Act, 2025
and Section 2 of Income Tax Act, 1961 and other relevant section .............................. xcvii

INCOME TAX ACT, 2025

CHAPTER I
Preliminary

1. Short title, extent and commencement. ........................................................................... 1
2. Definitions. .......................................................................................................................... 1
3. Definition of “tax year” ................................................................................................... 29

CHAPTER II
Basis of charge

4. Charge of income-tax....................................................................................................... 29
5. Scope of total income. ...................................................................................................... 30
6. Residence in India. ........................................................................................................... 30
7. Income deemed to be received and dividend deemed to be income in a tax year.. 32
8. Income on receipt of capital asset or stock-in-trade by specified person from
specified entity.................................................................................................................. 33
9. Income deemed to accrue or arise in India. .................................................................. 34
10. Apportionment of income between spouses governed by Portuguese Civil Code. 44

CHAPTER III

Incomes which do not form part of total income

11. Incomes not included in total income............................................................................ 45
12. Incomes not included in total income of political parties and electoral trusts. ....... 45

CHAPTER IV
Computation of total income

13. Heads of income. .............................................................................................................. 45
14. Income not forming part of total income and expenditure in relation to such
income................................................................................................................................ 46
15. Salaries. .............................................................................................................................. 46
16. Income from salary........................................................................................................... 47
17. Perquisite. .......................................................................................................................... 47
18. Profits in lieu of salary..................................................................................................... 51
19. Deductions from salaries................................................................................................. 51

20. Income from house property. ......................................................................................... 58
21. Determination of annual value....................................................................................... 58
22. Deductions from income from house property............................................................ 59
23. Arrears of rent and unrealised rent received subsequently. ...................................... 60
24. Property owned by co-owners........................................................................................ 61
25. Interpretation. ................................................................................................................... 61
26. Income under head “Profits and gains of business or profession.” .......................... 61
27. Manner of computing profits and gains of business or profession........................... 63
28. Rent, rates, taxes, repairs and insurance. ...................................................................... 63
29. Deductions related to employee welfare....................................................................... 64
30. Deduction on certain premium. ..................................................................................... 65
31. Deduction for bad debt and provision for bad and doubtful debt............................ 66
32. Other deductions.............................................................................................................. 68
33. Deduction for depreciation. ............................................................................................ 71
34. General conditions for allowable deductions............................................................... 74
35. Amounts not deductible in certain circumstances....................................................... 75
36. Expenses or payments not deductible in certain circumstances................................ 79
37. Certain deductions allowed on actual payment basis only........................................ 81
38. Certain sums deemed as profits and gains of business or profession. ..................... 82
39. Computation of actual cost. ............................................................................................ 84
40. Special provision for computation of cost of acquisition of certain assets. .............. 89
41. Written down value of depreciable asset...................................................................... 89
42. Capitalising impact of foreign exchange fluctuation. ................................................. 92
43. Taxation of foreign exchange fluctuation...................................................................... 93
44. Amortisation of certain preliminary expenses. ............................................................ 93
45. Expenditure on scientific research. ................................................................................ 96
46. Capital expenditure of specified business. ................................................................... 99
47. Expenditure on agricultural extension project and skill development project...... 105
48. Tea development account, coffee development account and rubber development
account. ............................................................................................................................ 105
49. Site Restoration Fund..................................................................................................... 105
50. Special provision in case of trade, profession or similar association. ..................... 106
51. Amortisation of expenditure for prospecting certain minerals. .............................. 106
52. Amortisation of expenditure for telecommunications services, amalgamation,
demerger, scheme of voluntary retirement, etc. ........................................................ 108
53. Full value of consideration for transfer of assets other than capital assets in certain
cases.................................................................................................................................. 112
54. Business of prospecting for mineral oils. .................................................................... 113

55. Insurance business. ........................................................................................................ 114
56. Special provision in case of interest income of specified financial institutions. .... 114
57. Revenue recognition for construction and service contracts.................................... 115
58. Special provision for computing profits and gains of business or profession on
presumptive basis in case of certain residents. .......................................................... 116

59. Computation of royalty and fee for technical services in hands of non-
residents........................................................................................................................... 120

60. Deduction of head office expenditure in case of non- residents.............................. 121
61. Special provision for computation of income on presumptive basis in respect of
certain business activities of certain non- residents................................................... 122
62. Maintenance of books of account................................................................................. 125
63. Tax audit. ......................................................................................................................... 126
64. Special provision for computing deductions in case of business reorganisation of
co-operative banks.......................................................................................................... 128
65. Interpretation for purposes of section 64 .................................................................... 129
66. Interpretation. ................................................................................................................. 130
67. Capital gains.................................................................................................................... 136
68. Capital gains on distribution of assets by companies in liquidation. ..................... 140
69. Capital gains on purchase by company of its own shares or other specified
securities. ......................................................................................................................... 141
70. Transactions not regarded as transfer. ........................................................................ 142
71. Withdrawal of exemption in certain cases.................................................................. 151
72. Mode of computation of capital gains......................................................................... 152
73. Cost with reference to certain modes of acquisition.................................................. 154
74. Special provision for computation of capital gains in case of depreciable assets. 158
75. Special provision for cost of acquisition in case of depreciable asset. .................... 159
76. Special provision for computation of capital gains in case of Market Linked
Debenture. ....................................................................................................................... 159
77. Special provision for computation of capital gains in case of slump sale. ............. 160
78. Special provision for full value of consideration in certain cases............................ 161
79. Special provision for full value of consideration for transfer of share other than
quoted share.................................................................................................................... 162
80. Fair market value deemed to be full value of consideration in certain cases. ....... 162
81. Advance money received. ............................................................................................. 163
82. Profit on sale of property used for residence.............................................................. 163
83. Capital gains on transfer of land used for agricultural purposes not to be charged
in certain cases. ............................................................................................................... 164
84. Capital gains on compulsory acquisition of lands and buildings not to be charged
in certain cases. ............................................................................................................... 165

85. Capital gains not to be charged on investment in certain bonds............................. 167
86. Capital gains on transfer of certain capital assets not to be charged in case of
investment in residential house.................................................................................... 167
87. Exemption of capital gains on transfer of assets in cases of shifting of industrial
undertaking from urban area........................................................................................ 170
88. Exemption of capital gains on transfer of assets in cases of shifting of industrial
undertaking from urban area to any Special Economic Zone.................................. 171
89. Extension of time for acquiring new asset or depositing or investing amount of
capital gains..................................................................................................................... 173
90. Meaning of “adjusted”, “cost of improvement” and “cost of acquisition.”........... 173
91. Reference to Valuation Officer...................................................................................... 177
92. Income from other sources............................................................................................ 177
93. Deductions....................................................................................................................... 182
94. Amounts not deductible................................................................................................ 183
95. Profits chargeable to tax. ............................................................................................... 183

CHAPTER V

Income of other persons included in total income of assessee

96. Transfer of income without transfer of assets. ........................................................... 184
97. Chargeability of income in transfer of assets.............................................................. 184
98. “Transfer” and “revocable transfer” defined. ............................................................ 184
99. Income of individual to include income of spouse, minor child, etc. ..................... 185
100. Liability of person in respect of income included in income of another person. .. 187

CHAPTER VI
Aggregation of income

101. Total income.................................................................................................................... 188
102. Unexplained credits. ...................................................................................................... 188
103. Unexplained investment. .............................................................................................. 189
104. Unexplained asset........................................................................................................... 189
105. Unexplained expenditure.............................................................................................. 189
106. Amount borrowed or repaid through negotiable instrument, hundi, etc.............. 190
107. Charge of tax. (NEW) ..................................................................................................... 190

CHAPTER VII

Set off, or carry forward and set off of losses

108. Set off of losses under same head of income. ............................................................. 190
109. Set off of losses under any other head of income....................................................... 190
110. Carry forward and set off of loss from house property. ........................................... 191
111. Carry forward and set off of loss from Capital gains................................................ 191
112. Carry forward and set off of business loss.................................................................. 192

113. Set off and carry forward of losses computed in respect of speculation business. 192
114. Set off and carry forward of losses computed in respect of specified business..... 193
115. Set off and carry forward of losses from specified activity. ..................................... 193
116. Treatment of accumulated losses and unabsorbed depreciation in amalgamation or
demerger, etc................................................................................................................... 194
117. Treatment of accumulated losses and unabsorbed depreciation in scheme of
amalgamation in certain cases. ..................................................................................... 198
118. Carry forward and set off of losses and unabsorbed depreciation in business
reorganisation of co-operative banks........................................................................... 200
119. Carry forward and set off of losses not permissible in certain cases. ..................... 202
120. No set off of losses against undisclosed income consequent to search, requisition
and survey. ...................................................................................................................... 204
121. Submission of return for losses..................................................................................... 204

CHAPTER VIII

Deductions to be made in Computing Total Income

122. Deductions to be made in computing total income................................................... 204
123. Deduction for life insurance premia, deferred annuity, contributions to provident
fund, etc. .......................................................................................................................... 206
124. Deduction in respect of employer and assessee contribution to pension scheme of
Central Government. ..................................................................................................... 206
125. Deduction in respect of contribution to Agnipath Scheme. ..................................... 208
126. Deduction in respect of health insurance premia. ..................................................... 208
127. Deduction in respect of maintenance including medical treatment of a dependant
who is a person with disability..................................................................................... 210
128. Deduction in respect of medical treatment, etc.......................................................... 213
129. Deduction in respect of interest on loan taken for higher education...................... 213
130. Deduction in respect of interest on loan taken for residential house property. .... 214
131. Deduction in respect of interest on loan taken for certain house property............ 215
132. Deduction in respect of purchase of electric vehicle. ................................................ 215
133. Deduction in respect of donations to certain funds, charitable institutions, etc. .. 216
134. Deductions in respect of rents paid. ............................................................................ 220
135. Deduction in respect of certain donations for scientific research or rural
development.................................................................................................................... 221
136. Deduction in respect of contributions given by companies to political parties..... 221
137. Deduction in respect of contributions given by any person to political parties.... 222
138. Deductions in respect of profits and gains from industrial undertakings or
enterprises engaged in infrastructure development, etc........................................... 222
139. Deductions in respect of profits and gains by an undertaking or enterprise
engaged in development of Special Economic Zone................................................. 222

140. Special provision in respect of specified business. .................................................... 223
141. Deduction in respect of profits and gains from certain industrial undertakings.. 226
142. Deductions in respect of profits and gains from housing projects.......................... 226
143. Special provisions in respect of certain undertakings in North-Eastern States..... 227
144. Special provisions in respect of newly established Units in Special Economic
Zones. ............................................................................................................................... 229
145. Deduction for businesses engaged in collecting and processing of bio-degradable
waste................................................................................................................................. 229
146. Deduction in respect of additional employee cost..................................................... 230
147. Deductions for income of Offshore Banking Units and Units of International
Financial Services Centre............................................................................................... 231
148. Deduction in respect of certain inter-corporate dividends....................................... 233
149. Deduction in respect of income of co-operative societies......................................... 234
151. Deduction in respect of royalty income, etc., of authors of certain books other than
text-books. ....................................................................................................................... 237
152. Deduction in respect of royalty on patents................................................................. 238
153. Deduction for interest on deposits............................................................................... 240
154. Deduction in case of a person with disability. ........................................................... 241

CHAPTER IX
Rebates and reliefs

155. Rebate to be allowed in computing income-tax......................................................... 241
156. Rebate of income-tax in case of certain individuals. ................................................. 241
157. Relief when salary, etc., is paid in arrears or in advance.......................................... 242
158. Relief from taxation in income from retirement benefit account maintained in a
notified country. ............................................................................................................. 242
159. Agreement with foreign countries or specified territories and adoption by Central
Government of agreement between specified associations for double taxation
relief.................................................................................................................................. 243
160. Countries with which no agreement exists................................................................. 245

CHAPTER X

Special provisions relating to avoidance of tax

161. Computation of income from international transaction and specified domestic
transaction having regard to arm’s length price........................................................ 246
162. Meaning of associated enterprise................................................................................. 247
163. Meaning of international transaction. ......................................................................... 249
164. Meaning of specified domestic transaction. ............................................................... 251
165. Determination of arm’s length price............................................................................ 251
166. Reference to Transfer Pricing Officer........................................................................... 253

167. Power of Board to make safe harbour rules. .............................................................. 256
168. Advance pricing agreement.......................................................................................... 256
169. Effect to advance pricing agreement............................................................................ 258
170. Secondary adjustment in certain cases. ....................................................................... 259
171. Maintenance, keeping and furnishing of information and document by certain
persons. ............................................................................................................................ 261
172. Report from an accountant to be furnished by persons entering into international
transaction or specified domestic transaction. ........................................................... 261
173. Definitions of certain terms relevant to computation of arm’s length price, etc. .. 262

174. Avoidance of income-tax by transactions resulting in transfer of income to non-
residents........................................................................................................................... 263

175. Avoidance of tax by certain transactions in securities. ............................................. 265
176. Special measures in respect of transactions with persons located in notified
jurisdictional area. .......................................................................................................... 268
177. Limitation on interest deduction in certain cases. ..................................................... 269

CHAPTER XI
General Anti-Avoidance Rule

178. Applicability of General Anti-Avoidance Rule.......................................................... 271
179. Impermissible avoidance arrangement. ...................................................................... 271
180. Arrangement to lack commercial substance............................................................... 271
181. Consequences of impermissible avoidance arrangement......................................... 273
182. Treatment of connected person and accommodating party..................................... 274
183. Application of this Chapter........................................................................................... 274
184. Interpretation. ................................................................................................................. 274

CHAPTER XII

Mode of payment in certain cases etc.

185. Mode of taking or accepting certain loans, deposits and specified sum. ............... 276
186. Mode of undertaking transactions............................................................................... 277
187. Acceptance of payment through prescribed electronic modes................................ 278
188. Mode of repayment of certain loans or deposits or specified advances................. 278
189. Interpretation. ................................................................................................................. 279

CHAPTER XIII

Determination of tax in special cases

190. Determination of tax where total income includes income on which no tax is
payable............................................................................................................................. 280
191. Tax on accumulated balance of recognised provident fund. ................................... 280
192. Tax in case of block assessment of search cases. ........................................................ 280

193. Tax on income from Global Depository Receipts purchased in foreign currency or
capital gains arising from their transfer. ..................................................................... 280
194. Tax on certain incomes. ................................................................................................. 282
195. Tax on income referred to in sections 102 to 106........................................................ 287
196. Tax on short- term capital gains in certain cases........................................................ 287
197. Tax on long-term capital gains. .................................................................................... 288
198. Tax on long- term capital gains in certain cases......................................................... 290
199. Tax on income of certain manufacturing domestic companies. .............................. 291
200. Tax on income of certain domestic companies........................................................... 292
201. Tax on income of new manufacturing domestic companies.................................... 293
202. New tax regime for individuals, Hindu undivided family and others. ................. 295
203. Tax on income of certain resident co- operative societies......................................... 297
204. Tax on income of certain new manufacturing co-operative societies. .................... 298
205. Conditions for tax on income of certain companies and co-operative societies.... 300
206. Special provision for minimum alternate tax and alternate minimum tax. ........... 303
207. Tax on dividends, royalty and fees for technical service in case of foreign
companies........................................................................................................................ 316
208. Tax on income from units purchased in foreign currency or capital gains arising
from their transfer. ......................................................................................................... 319
209. Tax on income from bonds or Global Depository Receipts purchased in foreign
currency or capital gains arising from their transfer................................................. 320
210. Tax on income of Foreign Institutional Investors from securities or capital gains
arising from their transfer. ............................................................................................ 322
211. Tax on non- resident sportsmen or sports associations. ........................................... 324
212. Interpretation. ................................................................................................................. 325
213. Special provision for computation of total income of non-residents. ..................... 325
214. Tax on investment income and long-term capital gains. .......................................... 326
215. Capital gains on transfer of foreign exchange assets not to be charged in certain
cases.................................................................................................................................. 326
216. Return of income not to be furnished in certain cases. ............................................. 327
217. Application of benefits under sections 212 to 216...................................................... 327
218. Tax on business income of Offshore Banking Units or International Financial
Services Centre unit........................................................................................................ 328
219. Conversion of an Indian branch of foreign company into subsidiary Indian
company. ......................................................................................................................... 329
220. Foreign company said to be resident in India. ........................................................... 330
221. Tax on income from securitisation trusts.................................................................... 331
222. Tax on income in case of venture capital undertakings............................................ 332
223. Tax on income of unit holder and business trust....................................................... 333

224. Tax on income of investment fund and its unit holders. .......................................... 334
225. Income from business of operating qualifying ships. ............................................... 336
226. Tonnage tax scheme....................................................................................................... 336
227. Computation of tonnage income.................................................................................. 337
228. Relevant shipping income and exclusion from book profit. .................................... 339
229. Depreciation and gains relating to tonnage tax assets. ............................................. 342
230. Exclusion of deduction, loss, set off, etc...................................................................... 344
231. Method of opting of tonnage tax scheme and validity. ............................................ 345
232. Certain conditions for applicability of tonnage tax scheme. .................................... 346
233. Amalgamation and demerger....................................................................................... 350
234. Avoidance of tax and exclusion from tonnage tax scheme. ..................................... 350
235. Interpretation. ................................................................................................................. 351

CHAPTER XIV
Tax Administration

236. Income-tax authorities. .................................................................................................. 353
237. Appointment of income-tax authorities. ..................................................................... 354
238. Control of income-tax authorities. ............................................................................... 354
239. Instructions to subordinate authorities. ...................................................................... 355
240. Taxpayer’s Charter......................................................................................................... 356
241. Jurisdiction of income-tax authorities. ........................................................................ 356
242. Jurisdiction of Assessing Officers................................................................................. 357
243. Power to transfer cases. ................................................................................................. 358
244. Change of incumbent of an office. ............................................................................... 359
245. Faceless jurisdiction of income-tax authorities........................................................... 360
246. Power regarding discovery, production of evidence, etc. ........................................ 360
247. Search and seizure.......................................................................................................... 361
248. Powers to requisition. .................................................................................................... 366
249. Reasons not to be disclosed........................................................................................... 367
250. Application of seized or requisitioned assets............................................................. 367
251. Copying, extraction, retention and release of books of account and documents
seized or requisitioned................................................................................................... 369
252. Power to call for information........................................................................................ 370
253. Powers of survey. ........................................................................................................... 371
254. Power to collect certain information............................................................................ 373
255. Power to inspect registers of companies. .................................................................... 374
256. Power of certain income-tax authorities...................................................................... 374
257. Proceedings before income-tax authorities to be judicial proceedings................... 374
258. Disclosure of information relating to assessees.......................................................... 375

259. Power to call for information by prescribed income-tax authority......................... 375
260. Faceless collection of information. ............................................................................... 376
261. Interpretation. ................................................................................................................. 376

CHAPTER XV
Return of Income

262. Permanent Account Number........................................................................................ 378
263. Return of income. ........................................................................................................... 381
264. Scheme for submission of returns through tax return preparers. ........................... 388
265. Return by whom to be verified..................................................................................... 389
266. Self-assessment. .............................................................................................................. 391
267. Tax on updated return................................................................................................... 393

CHAPTER XVI
Procedure for assessment

268. Inquiry before assessment............................................................................................. 397
269. Estimation of value of assets by Valuation Officer.................................................... 399
270. Assessment...................................................................................................................... 401
271. Best judgment assessment............................................................................................. 405
272. Power of Joint Commissioner to issue directions in certain cases........................... 405
273. Faceless Assessment....................................................................................................... 406
274. Reference to Principal Commissioner or Commissioner in certain cases............... 409
275. Reference to Dispute Resolution Panel. ...................................................................... 412
276. Method of accounting. ................................................................................................... 414
277. Method of accounting in certain cases......................................................................... 414
278. Taxability of certain income.......................................................................................... 415
279. Income escaping assessment......................................................................................... 415
280. Issue of notice where income has escaped assessment. ............................................ 416
281. Procedure before issuance of notice under section 280............................................. 417
282. Time limit for notices under sections 280 and 281..................................................... 418
283. Provision for cases where assessment is in pursuance of an order on appeal, etc.419
284. Sanction for issue of notice............................................................................................ 420
285. Other provisions............................................................................................................. 420
286. Time limit for completion of assessment, reassessment and recomputation......... 420
287. Rectification of mistake.................................................................................................. 425
288. Other amendments......................................................................................................... 427
289. Notice of demand. .......................................................................................................... 435
290. Modification and revision of notice in certain cases.................................................. 435
291. Intimation of loss. ........................................................................................................... 436

292. Assessment of total undisclosed income as a result of search. ................................ 436
293. Computation of total undisclosed income of block period. ..................................... 437
294. Procedure for block assessment. .................................................................................. 440
295. Undisclosed income of any other person.................................................................... 441
296. Time-limit for completion of block assessment.......................................................... 442
297. Certain interests and penalties not to be levied or imposed. ................................... 444
298. Levy of interest and penalty in certain cases.............................................................. 444
299. Authority competent to make assessment of block period. ..................................... 446
300. Application of other provisions of Act........................................................................ 446
301. Interpretation. ................................................................................................................. 447

CHAPTER XVII

Special provisions relating to certain persons

302. Legal representative....................................................................................................... 447
303. Representative assessee. ................................................................................................ 448
304. Liability of representative assessee. ............................................................................. 449
305. Right of representative assessee to recover tax paid. ................................................ 450
306. Who may be regarded as agent. ................................................................................... 451
307. Charge of tax where share of beneficiaries unknown. .............................................. 451
308. Charge of tax in case of oral trust................................................................................. 453
309. Method of computing a member’s share in income of association of persons or
body of individuals. ....................................................................................................... 453
310. Share of member of association of persons or body of individuals in income of
association or body......................................................................................................... 454
311. Charge of tax where shares of members in association of persons or body of
individuals unknown, etc.............................................................................................. 454
312. Executor. .......................................................................................................................... 455
313. Succession to business or profession otherwise than on death................................ 456
314. Effect of order of tribunal or court in respect of business reorganisation. ............. 457
315. Assessment after partition of Hindu undivided family............................................ 458
316. Shipping business of non-residents. ............................................................................ 460
317. Assessment of persons leaving India........................................................................... 461
318. Assessment of association of persons or body of individuals or artificial juridical
person formed for a particular event or purpose....................................................... 462
319. Assessment of persons likely to transfer property to avoid tax............................... 462
320. Discontinued business. .................................................................................................. 463
321. Association dissolved or business discontinued........................................................ 464
322. Company in liquidation. ............................................................................................... 464
323. Liability of directors of private company.................................................................... 466

324. Charge of tax in case of a firm. ..................................................................................... 466
325. Assessment as a firm...................................................................................................... 466
326. Assessment when section 325 not complied with...................................................... 467
327. Change in constitution of a firm................................................................................... 467
328. Succession of one firm by another firm....................................................................... 468
329. Joint and several liability of partners for tax payable by firm. ................................ 468
330. Firm dissolved or business discontinued.................................................................... 468
331. Liability of partners of limited liability partnership in liquidation......................... 469
332. Application for registration........................................................................................... 469
333. Switching over of regimes............................................................................................. 473
334. Tax on income of registered non-profit organisation................................................ 474
335. Regular income. (NEW)................................................................................................. 474
336. Taxable regular income. ................................................................................................ 475
337. Specified income............................................................................................................. 475
338. Income not to be included in regular income............................................................. 477
339. Corpus donation............................................................................................................. 478
340. Deemed corpus donation. ............................................................................................. 478
341. Application of income.................................................................................................... 478
342. Accumulated income. .................................................................................................... 481
343. Deemed accumulated income. (NEW)......................................................................... 482
344. Business undertaking held as property....................................................................... 482
345. Restriction on commercial activities by a registered non-profit organisation. ...... 482
346. Restriction on commercial activities by registered non-profit organisation, carrying
out advancement of any other object of general public utility. ............................... 482
347. Books of account............................................................................................................. 483
348. Audit. ............................................................................................................................... 483
349. Return of income. ........................................................................................................... 483
350. Permitted modes of investment. .................................................................................. 483
351. Specified violation.......................................................................................................... 483
352. Tax on accreted income. ................................................................................................ 485
353. Other violations. ............................................................................................................. 490
354. Application for approval for purpose of section 133(1)(b)(ii). ................................. 491
354A.Merger of registered non-profit organisation in certain cases. ................................ 494
355. Interpretation. (NEW).................................................................................................... 494

CHAPTER XVIII

Appeals, revisions and alternate dispute resolutions

356. Appealable orders before Joint Commissioner (Appeals). ....................................... 497
357. Appealable orders before Commissioner (Appeals). ................................................ 498

358. Form of appeal and limitation. ..................................................................................... 499
359. Procedure in appeal. ...................................................................................................... 500
360. Powers of Joint Commissioner (Appeals) or Commissioner (Appeals). ................ 501
361. Appellate Tribunal. ........................................................................................................ 501
362. Appeals to Appellate Tribunal. .................................................................................... 502
363. Orders of Appellate Tribunal........................................................................................ 504
364. Procedure of Appellate Tribunal.................................................................................. 505
365. Appeal to High Court. ................................................................................................... 506
366. Case before High Court to be heard by not less than two Judges. .......................... 507
367. Appeal to Supreme Court. ............................................................................................ 507
368. Hearing before Supreme Court. ................................................................................... 507
369. Tax to be paid irrespective of appeal, etc.................................................................... 508
370. Execution for costs awarded by Supreme Court........................................................ 508
371. Amendment of assessment on appeal. ........................................................................ 508
372. Exclusion of time taken for copy.................................................................................. 508
373. Filing of appeal by income-tax authority.................................................................... 508
374. Interpretation of “High Court.”.................................................................................... 509
375. Procedure when assessee claims identical question of law is pending before High
Court or Supreme Court................................................................................................ 509
376. Procedure where an identical question of law is pending before High Courts or
Supreme Court................................................................................................................ 511
377. Revision of orders prejudicial to revenue. .................................................................. 512
378. Revision of other orders. ............................................................................................... 514
379. Dispute Resolution Committee. ................................................................................... 516
380. Interpretation. ................................................................................................................. 517
381. Board for Advance Rulings........................................................................................... 518
382. Vacancies, etc., not to invalidate proceedings............................................................ 518
383. Application for advance ruling. ................................................................................... 518
384. Procedure on receipt of application............................................................................. 518
385. Appellate authority not to proceed in certain cases. ................................................. 519
386. Advance ruling to be void in certain circumstances. ................................................ 519
387. Powers of the Board for Advance Rulings.................................................................. 520
388. Procedure of Board for Advance Rulings. .................................................................. 520
389. Appeal.............................................................................................................................. 520

CHAPTER XIX
Collection and recovery of tax

390. Deduction or collection at source and advance payment......................................... 520
391. Direct payment. .............................................................................................................. 521

392. Salary and accumulated balance due to an employee. ............................................. 522
393. Tax to be deducted at source. ....................................................................................... 524
394. Collection of tax at source. ............................................................................................ 556
395. Certificates....................................................................................................................... 558
396. Tax deducted is income received. ................................................................................ 560
397. Compliance and reporting. ........................................................................................... 560
398. Consequences of failure to deduct or pay or, collect or pay. ................................... 564
399. Processing........................................................................................................................ 565
400. Power of Central Government to relax provisions of this Chapter......................... 566
401. Bar against direct demand on assessee........................................................................ 567
402. Interpretation. ................................................................................................................. 567
403. Liability for payment of advance tax........................................................................... 576
404. Conditions of liability to pay advance tax. ................................................................. 576
405. Computation of advance tax......................................................................................... 576
406. Payment of advance tax by assessee on his own accord........................................... 577
407. Payment of advance tax by assessee in pursuance of order of Assessing Officer. 577
408. Instalments of advance tax and due dates. ................................................................. 579
409. When assessee is deemed to be in default. ................................................................. 579
410. Credit for advance tax.................................................................................................... 580
411. When tax payable and when assessee deemed in default. ....................................... 580
412. Penalty payable when tax in default............................................................................ 583
413. Certificate by Tax Recovery Officer and validity thereof. ........................................ 583
414. Tax Recovery Officer by whom recovery is to be effected. ...................................... 584
415. Stay of proceedings in pursuance of certificate and amendment or cancellation
thereof. ............................................................................................................................. 585
416. Other modes of recovery. .............................................................................................. 585
417. Recovery through State Government. ......................................................................... 588
418. Recovery of tax in pursuance of agreements with foreign countries...................... 588
419. Recovery of penalties, fine, interest and other sums. ................................................ 589
420. Tax clearance certificate................................................................................................. 589
421. Recovery by suit or under other law not affected...................................................... 591
422. Recovery of tax arrear in respect of non-resident from his assets. .......................... 591
423. Interest for defaults in furnishing return of income.................................................. 591
424. Interest for defaults in payment of advance tax......................................................... 594
425. Interest for deferment of advance tax.......................................................................... 596
426. Interest on excess refund. .............................................................................................. 598
427. Fee for default in furnishing statements. .................................................................... 599
428. Fee for default in furnishing return of income, audited accounts and reports...... 599

429. Fee for default relating to statement or certificate. .................................................... 600
430. Fee for default relating to intimation of Aadhaar number. ...................................... 601

CHAPTER XX
Refunds

431. Refunds............................................................................................................................ 601
432. Person entitled to claim refund in certain special cases............................................ 601
433. Form of claim for refund and limitation. .................................................................... 601
434. Refund for denying liability to deduct tax in certain cases. ..................................... 601
435. Refund on appeal, etc..................................................................................................... 602
436. Correctness of assessment not to be questioned. ....................................................... 602
437. Interest on refunds. ........................................................................................................ 602
438. Set off and withholding of refunds in certain cases................................................... 604

CHAPTER XXI
Penalties

439. Penalty for under-reporting and misreporting of income........................................ 605
440. ........................................................................................................................................... 609
441. Failure to keep, maintain or retain books of account, documents, etc.................... 611
442. Penalty for failure to keep and maintain information and document, etc., in respect
of certain transactions. ................................................................................................... 611
443. ........................................................................................................................................... 611
444. Penalty for false entry, etc., in books of account. ....................................................... 611
445. Benefits to related persons. ........................................................................................... 612
446. Penalty for failure to furnish information or for furnishing inaccurate information
on transaction of crypto-asset....................................................................................... 612
447. ........................................................................................................................................... 613
448. Penalty for failure to deduct tax at source. ................................................................. 613
449. Penalty for failure to collect tax at source. .................................................................. 613
450. Penalty for failure to comply with provisions of section 185................................... 613
451. Penalty for failure to comply with provisions of section 186................................... 614
452. Penalty for failure to comply with provisions of section 187................................... 614
453. Penalty for failure to comply with provisions of section 188................................... 614
454. Penalty for failure to furnish statement of financial transaction or reportable
account after a notice. .................................................................................................... 614
455. Penalty for furnishing inaccurate statement of financial transaction or reportable
account. ............................................................................................................................ 614
456. Penalty for failure to furnish statement or information or document by an eligible
investment fund.............................................................................................................. 615
457. Penalty for failure to furnish information or document under section 171. .......... 615

458. Penalty for failure to furnish information or document under section 506. .......... 615
459. Penalty for failure to furnish report or for furnishing inaccurate report under
section 511........................................................................................................................ 616
460. Penalty for failure to submit statement under section 505. ...................................... 616
461. Penalty for failure to furnish statements, etc.............................................................. 617
462. Penalty for failure to furnish information or furnishing inaccurate information
under section 397(3)(d). ................................................................................................. 617
463. Penalty for furnishing incorrect information in reports or certificates................... 617
464. Penalty for failure to furnish statements, etc.............................................................. 618
465. Penalty for failure to answer questions, sign statements, furnish information,
returns or statements, allow inspections, etc.............................................................. 618
466. Penalty for failure to comply with the provisions of section 254. ........................... 620
467. Penalty for failure to comply with the provisions of................................................. 620
468. Penalty for failure to comply with the provisions of section 397. ........................... 620
469. Power to reduce or waive penalty, etc., in certain cases........................................... 620
470. Penalty not to be imposed in certain cases. ................................................................ 622
471. Procedure......................................................................................................................... 622
472. Bar of limitation for imposing penalties...................................................................... 623

CHAPTER XXII
Offences and Prosecution

473. ........................................................................................................................................... 624
474. ........................................................................................................................................... 624
475. Removal, concealment, transfer or delivery of property to prevent tax recovery. 624
476. Failure to pay tax to credit of Central Government under Chapter XIX-B. ........... 624
477. Failure to pay tax collected at source........................................................................... 625
478. Wilful attempt to evade tax, etc.................................................................................... 626
479. Failure to furnish returns of income. ........................................................................... 627
480. Failure to furnish return of income setting forth undisclosed income. .................. 628
481. Failure to comply with a direction of special audit or valuation............................. 628
482. False statement in verification, etc. .............................................................................. 628
483. Falsification of books of account or document, etc.................................................... 629
484. Abetment of false return, etc......................................................................................... 629
485. Punishment for second and subsequent offences. ..................................................... 630
486. Punishment not to be imposed in certain cases. ........................................................ 630
487. Offences by companies. ................................................................................................. 630
488. Offences by Hindu undivided family.......................................................................... 631
489. Presumption as to assets, books of account, etc., in certain cases............................ 631
490. Presumption as to culpable mental state..................................................................... 632

491. Prosecution to be at instance of Principal Chief Commissioner or Chief
Commissioner or Principal Commissioner or Commissioner. ................................ 632
492. Certain offences to be non- cognizable........................................................................ 633
493. Proof of entries in records or documents. ................................................................... 633
494. Disclosure of particulars by public servants............................................................... 633
495. Special Courts. ................................................................................................................ 634
496. Offences triable by Special Court. ................................................................................ 634
497. Trial of offences as summons case. .............................................................................. 634
498. Application of Bharatiya Nagarik Suraksha Sanhita, 2023 to proceedings before
Special Court. .................................................................................................................. 635

CHAPTER XXIII
Miscellaneous

499. Certain transfers to be void........................................................................................... 635
500. Provisional attachment to protect revenue in certain cases. .................................... 636
501. Service of notice, generally............................................................................................ 637
502. Authentication of notices and other documents. ....................................................... 638
503. Service of notice when family is disrupted or firm etc., is dissolved...................... 638
504. Service of notice in case of discontinued business..................................................... 638
505. Submission of statement by a non-resident having liaison office. .......................... 639
506. Furnishing of information or documents by an Indian concern in certain cases. . 639
507. Submission of statements by producers of cinematograph films or persons
engaged in specified activity......................................................................................... 639
508. Obligation to furnish statement of financial transaction or reportable account.... 640
509. Obligation to furnish information on transaction of crypto-asset........................... 642
510. Annual information statement. .................................................................................... 643
511. Furnishing of report in respect of international group. ............................................ 643
512. Publication of information respecting assessees in certain cases. ........................... 647
513. Appearance by registered valuer in certain matters. ................................................ 647
514. Registration of valuers. (NEW)..................................................................................... 648
515. Appearance by authorised representative.................................................................. 648
516. Rounding off of amount of total income, or amount payable or refundable......... 651
517. Receipt to be given. ........................................................................................................ 652
518. Indemnity. ....................................................................................................................... 652
519. Power to tender immunity from prosecution............................................................. 652
520. Cognizance of offences. ................................................................................................. 653
521. Probation of Offenders Act, 1958 and section 401 of Bharatiya Nagarik Suraksha
Sanhita, 2023, not to apply. ........................................................................................... 653

522. Circumstances in which return of income, assessment, approvals, etc., not to be
invalid .............................................................................................................................. 653
523. Notice deemed to be valid in certain circumstances. ................................................ 654
524. Presumption as to assets, books of account, etc......................................................... 654
525. Authorisation and assessment in case of search or requisition. .............................. 655
526. Bar of suits in civil courts. ............................................................................................. 655
527. Power to make exemption, etc., in relation to participation in business of
prospecting for, extraction, etc., of mineral oils. ........................................................ 655
528. Power of Central Government or Board to condone delays in obtaining
approval........................................................................................................................... 656
529. Power to withdraw approval........................................................................................ 656
530. Act to have effect pending legislative provision for charge of tax. ......................... 656
531. Power to rescind exemption in relation to certain Union territories already granted
under section 294A of the Income-tax Act, 1961. ....................................................... 657
532. Power to frame schemes................................................................................................ 657
533. Power to make rules....................................................................................................... 657
534. Laying before Parliament. ............................................................................................. 660
535. Removal of difficulties................................................................................................... 660
536. Repeal and savings......................................................................................................... 661
SCHEDULE I ............................................................................................................................. 667
SCHEDULE II............................................................................................................................ 670
SCHEDULE III........................................................................................................................... 679
SCHEDULE IV........................................................................................................................... 700
SCHEDULE V............................................................................................................................ 709
SCHEDULE VI........................................................................................................................... 719
SCHEDULE VII......................................................................................................................... 727
SCHEDULE VIII........................................................................................................................ 738
SCHEDULE IX........................................................................................................................... 740
SCHEDULE X............................................................................................................................ 744
SCHEDULE XI........................................................................................................................... 748
SCHEDULE XII ......................................................................................................................... 760
SCHEDULE XIII........................................................................................................................ 763
SCHEDULE XIV........................................................................................................................ 764
SCHEDULE XV ......................................................................................................................... 766
SCHEDULE XVI........................................................................................................................ 776