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Section 530 of Income Tax Act 2025 in hindi

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 nevertheless 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.

Summary

If a law passed by the national parliament (Central Act) has not yet set the tax rates on April 1st of any tax year (the twelve-month period starting April 1), this Act will still continue to work.
In this situation, taxes will be calculated using either the tax rates from the previous tax year or the tax rates proposed in the new Bill currently being discussed in Parliament.
The tax department must automatically use whichever of these two tax rate options is more beneficial (favourable) to the taxpayer (assessee).
These temporary tax rates will stay in place only until the national parliament formally passes the new law to charge taxes for that specific tax year.

Practical examples

1On April 1, 2027, the Parliament has not yet passed the tax rate law for the new tax year. Ramesh is an ordinary taxpayer whose tax must be deducted from his salary. The tax rate in the preceding year of 2026-27 was 10%, while the new proposed Bill suggests a rate of 12%. Because the previous year's rate of 10% is more favourable to Ramesh, his tax is calculated at 10% under Section 530 until the final law is passed.

2On April 1, 2028, a new budget has been proposed but is not yet law. The proposed Bill has a business tax rate of 15%, while the previous year's rate was 20%. For Anita, who runs a local grocery shop, the proposed Bill's rate of 15% is more favourable than the previous year's 20%. Under Section 530, her business tax is calculated at the lower proposed 15% rate until Parliament passes the final Act.

FAQ

1. Who decides which tax rate to apply when a new tax law is delayed?

The law itself decides by automatically applying the option that is more favourable (beneficial) to the assessee, which is the legal term for a taxpayer.

2. For how long do these temporary tax rates remain in force?

These temporary rates apply only until the national parliament formally passes the Central Act that charges the tax for that tax year.

3. What is a Central Act under this provision?

A Central Act is any official law passed by the national parliament of India.

Test yourself

Q1.On what specific date of a tax year does Section 530 apply if no Central Act has charged tax yet?

Q2.Which two provisions are compared to determine the tax rate pending legislative provision under Section 530?

Q3.Which of the compared provisions must be applied under Section 530?

Q4.Under Section 530, until when does the temporary rule apply?

Q5.Which Act's rules are applied as a fallback under Section 530 when a new tax charge is pending?

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