New Provision
Section 438, IT Act 2025
Replaces (IT Act 1961)
576 245
Chapter
Chapter XIX — Refunds
Effective From
1 April 2026
Statutory Text — Section 438
here a refund becomes due or is found to be due to any person under this Act, the Assessing Officer or Commissioner or Principal Commissioner or Chief Commissioner or Principal Chief Commissioner, as the case may be, may in lieu of payment of the refund, set off the amount to be refunded or any part of that amount, against the sum, if any, remaining payable under this Act by such person. (2) Any action under sub-section (1) shall be taken after giving an intimation in writing to such person of the action proposed to be taken. (3) Where,–– (a) a part of the refund is set off under sub-section (1); or (b) no such amount as referred to in clause (a) is set off, and refund becomes due to a person, and the Assessing Officer, having regard to the fact that proceedings for assessment or reassessment are pending in the case of such person, may, for reasons to be recorded in writing and with the previous approval of the Principal Commissioner or the Commissioner, withhold the refund up to sixty days from the date on which such assessment or reassessment is made.
CHAPTER XXI PENALTIES
Shahi & Co. — Our Understanding
This section is part of Chapter XIX of the Income Tax Act, 2025, effective from 1 April 2026. It carries forward the corresponding provision from the Income Tax Act, 1961 with simplified language and restructured drafting.
Practical Note: For specific guidance on how this provision applies to your situation, consult a qualified Chartered Accountant. The Income Tax Act, 2025 retains the substance of the old law while making it more accessible.
Shahi & Co., Chartered Accountants
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Disclaimer: This is a reproduction of Section 438 of the Income Tax Act, 2025 (No. 30 of 2025) as published in the Official Gazette of India (CG-DL-E-22082025-265620) for informational and reference purposes only. Shahi & Co., Chartered Accountants makes no warranty as to completeness or accuracy. For the official authenticated text refer to
egazette.gov.in or
incometaxindia.gov.in. This does not constitute legal or tax advice.