Section 434 of Income Tax Act 2025
- (1)Where,—
- (a)under an agreement or other arrangement, in writing, the tax deductible on any income, other than interest in section 393(2) (Table: Sl. No. 17), is to be borne by the person by whom the income is payable; and
- (b)such person having paid such tax to the credit of the Central Government claims that no tax was required to be deducted on such income,
he may, within thirty days from the date of payment of such tax, file an application before the Assessing Officer for refund of such tax in such form and such manner, as may be prescribed.
- (2)The Assessing Officer shall, by an order in writing, allow or reject the application as referred to in sub-section (1).
- (3)No application under sub-section (1) shall be rejected unless an opportunity of being heard has been given to the applicant.
- (4)The Assessing Officer may, before passing an order under sub-section (2), make such inquiry as he considers necessary.
- (5)The order under sub-section (2) shall be passed within six months from the end of the month in which application under sub-section (1) is received.
Summary
- Under a written agreement, a person paying some income (except interest under section 393(2) Table Sl. No. 17) agrees to pay the tax themselves instead of cutting it from the payee's income.
- If that payer pays this tax to the government but believes they were not legally required to deduct it, they can apply to the Assessing Officer (the tax officer) for a refund.
- This refund application must be submitted within thirty days of making the tax payment, using the officially required form and method.
- The Assessing Officer can allow or reject this application through a written order.
- The Assessing Officer cannot reject the application unless they first give the applicant a fair opportunity of being heard to present their case.
- The final written decision to allow or reject the application must be made within six months from the end of the month in which the application was received.
Practical examples
FAQ
1. Who can file a refund application under this section?
The person who paid the tax to the credit of the Central Government under a written agreement to bear that tax can file the application.
2. What is the deadline to file this refund application?
You must file the application before the Assessing Officer (the tax officer) within thirty days from the date you paid the tax.
3. Can the tax officer reject my application immediately without telling me?
No, the tax officer cannot reject your application unless they have given you an opportunity of being heard (a fair chance to speak and present your case).
4. What is the time limit for the tax officer to pass the final decision?
The tax officer must pass the written order to allow or reject the application within six months from the end of the month in which your application was received.
5. Are there any types of payments that are excluded from this refund process?
Yes, interest payments mentioned under section 393(2) (Table: Serial Number 17) are excluded from this process.
Test yourself
Q1.Within how many days from the date of tax payment must the application be filed under Section 434?
Q2.Which type of income's tax deductible is explicitly excluded from Section 434?
Q3.Under Section 434, the agreement or arrangement to bear the tax must be in what form?
Q4.What must the Assessing Officer do before rejecting an application under Section 434?
Q5.Within what period must the Assessing Officer pass the written order under Section 434?
Q6.In what format must the final decision of the Assessing Officer be passed?