Chapter XIV - Tax Administration
Section 240
Section 240: taxpayer's charter
Section 240 is a short administrative provision: the CBDT must adopt and declare a Taxpayer's Charter, and must also issue instructions to income-tax authorities so that the Charter is actually administered in practice.
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Need advice on Section 240?
This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
The Board shall adopt and declare a Taxpayer's Charter and issue such orders, instructions, directions or guidelines to other income-tax authorities as it considers fit for the administration of such Charter.
Introduction
The Income-tax Act mostly tells the taxpayer what to do - file returns, pay tax, keep records. Section 240 looks at that balance from the other side: it places an obligation on the department to have a formal, declared standard of how it will deal with taxpayers.
The section does not itself set out the content of the Charter. It mandates only two things - first, the Board (CBDT) must adopt and declare the Charter; second, the Board must give its authorities such orders, instructions, directions or guidelines as are needed to administer that Charter. Section 240 does not itself specify the Charter's actual text, remedies or procedure; to understand those, look separately at the declared Charter and the applicable legal provisions.
For a practical taxpayer this means: the declared Charter gives the taxpayer a reference for understanding the department's published standards. Section 240 on its own does not specify any particular refund, assessment result, remedy or court procedure.
Key takeaways
The obligation is on the Board, not the taxpayer
This is one of the few sections that places no compliance duty on the taxpayer. The entire duty is on the CBDT - to adopt the Charter, to declare it, and to issue instructions for its administration.
The Charter's content is not in the section
The wording of the section is deliberately open. It gives no statutory list of what the Charter will contain - the Board decides that through its declaration. The current wording of the Charter should therefore always be checked against the Board's latest declaration, not this section.
"Shall" means this is mandatory
The section says "shall adopt and declare", not "may". Declaring a Charter is therefore not a matter of the Board's discretion. The discretion lies only in the form and level of detail of the instructions - that is what "as it considers fit" applies to.
The Board gives authorities directions for administering the Charter
Section 240 requires the Board to issue orders, instructions, directions or guidelines to other income-tax authorities for the administration of the Charter. Understand the effect of any particular direction by reading its text and the applicable provisions.
This is different from Section 239
Section 239 is the Board's general power to give instructions to subordinate authorities. Section 240 is a specific, Charter-focused application of that power - together with the additional duty to adopt the Charter.
What the section provides
The text is very short, but it contains two separate obligations:
- The Board must adopt a Taxpayer's Charter and declare it - that is, preparing it internally is not enough; it must be publicly declared
- The Board must issue to other income-tax authorities such orders, instructions, directions or guidelines as it considers fit for the administration of that Charter
How a taxpayer can use it in practice
Because the content of the Charter comes from the Board's declaration, the value of this section to a taxpayer is indirect. These are the practical ways to use it:
- Use the declared Charter as a reference document - when you are corresponding with the department, it helps to know the expected service standard
- If an officer clearly departs from the declared standard, cite the Charter specifically in the grievance mechanism
- Do not treat the Charter as a substitute for statutory relief - for assessment, appeal or refund, the Act's own specific provisions are what count
Practical checklist
Do
- Keep a copy of the current Taxpayer's Charter declared by the Board in your records
- Maintain a dated record of every interaction with the department - this is what becomes evidence in a grievance
- For service-standard concerns, identify the applicable grievance channel separately from the substantive assessment or appeal remedy.
- Along with the Charter, also cite the specific section that is the basis of your actual relief
Avoid
- Do not treat Section 240 alone as an automatic assessment cancellation or a specific appeal ground; verify the applicable provisions.
- Do not assume that the content of the Charter is written in Section 240 - it is in the Board's declaration
- Do not miss statutory deadlines by relying on the Charter - the Charter does not extend any time limit
Illustrative example
Hypothetical example: refund delay and the Charter
Hypothetical facts (illustration only, not a real taxpayer): An assessee's refund remains pending for months even after processing. No reply is coming from the department. The assessee thinks that by citing the Charter under Section 240 they can obtain relief directly.
What Section 240 provides
Section 240 states the Board's Charter-related duty. The question of refund entitlement and remedy will be decided by the refund provisions and the facts of the case.
The Charter's proper role
The declared Charter sets a standard of timely service. It is therefore a supporting reference in a grievance - it shows that the delay is against the department's own declared standard.
Where the actual relief comes from
The substantive basis for a refund lies in the Act's refund provisions (Chapter XX), which also include the provision for interest on refunds. Those are what should be cited in the grievance.
Outcome
- The right approach is: keep the refund provisions as the primary ground in the grievance, and use the Charter as a supporting reference showing that the declared service standard was not met either.
- For the refund, make the relevant refund provisions and the record the primary basis; the text of Section 240 does not itself calculate any refund amount, deadline or interest.
Glossary
- Board (CBDT)
- Central Board of Direct Taxes - the apex authority that administers direct taxes, and which adopts and declares the Charter.
- Taxpayer's Charter
- The document declared by the Board that sets out how the department will behave towards taxpayers and the service standard it will maintain.
- Income-tax authorities
- Authorities appointed under the Act, whom the Board may address under section 240 for administration of the Charter.
- Orders, instructions, directions, guidelines
- The different forms in which the Board may give administrative directions to its authorities; the section leaves the Board free to choose the form.
Section 240 is the part of the Act that places an obligation on the department, not the taxpayer. It mandates the CBDT to adopt and declare a Taxpayer's Charter, and to give its authorities the orders or instructions needed to administer that Charter. The section does not itself set out the Charter's content - that is in the Board's declaration. For a taxpayer, the practical meaning is that the Charter is a useful reference standard that can be cited in a grievance, while specific relief depends on the applicable provisions and the facts.
Frequently asked questions
Does Section 240 itself set out the contents of the Taxpayer's Charter?
No. The section only mandates the Board to adopt and declare the Charter and to issue administrative instructions for it. The actual content of the Charter is declared separately by the Board.
Can the Taxpayer's Charter be enforced in court?
Section 240 does not give a categorical answer to this question. It requires the Board to adopt and declare the Charter and to give authorities directions for its administration. The enforceability of any particular Charter commitment will depend on the declared Charter, the applicable law and the facts; for a remedy, also look at the relevant statutory provision.
What is the difference between Section 240 and Section 239?
Section 239 is the Board's general power to give instructions to subordinate income-tax authorities. Section 240 is the Charter-specific version of it, and in addition it contains a duty to adopt and declare the Charter, which Section 239 does not.
Does Section 240 place any obligation on the taxpayer?
No. This section contains no compliance requirement, no filing and no deadline for the taxpayer. The entire duty is on the CBDT.
Need help applying this provision to your situation?
Talk to our tax team about your rights under the Taxpayer's CharterLast updated 11 October 2026