Chapter XV - Return of Income
Section 264
Section 264: scheme for submission of returns through tax return preparers
Section 264 lets the Board set up a notified scheme under which certain taxpayers can get help preparing and filing their income-tax returns through an authorised "tax return preparer," as an alternative filing route alongside the standard process under Section 263.
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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
(1) The Board may make a Scheme for furnishing returns of income through a tax return preparer and such Scheme shall be notified, which—
(a) may enable any specified class or classes of persons in preparing and furnishing returns of income through a tax return preparer authorised to act as such under the Scheme;
(b) may be made irrespective of provisions of section 263.
(2) For the purpose of this section,—
(a) “tax return preparer” means any individual, not being a person referred to in section 515(3)(a)(ii) or an employee of the “specified class or classes of persons”, who has been authorised to act as a tax return preparer under the Scheme made under this section;
(b) “specified class or classes of persons” means any person, other than a company or a person, whose accounts are required to be audited under section 63 or under any other law, who is required to furnish a return of income under this Act.
(3) Every notification for the Scheme referred to in sub-section (1) shall be issued as per section 534 of this Act.
Introduction
Section 264 permits a notified scheme under which authorised tax return preparers help specified individuals or other eligible persons prepare and file income-tax returns.
The definition of eligible class excludes companies and persons whose accounts must be audited under section 63 or another law. The authorised preparer is also subject to the section’s exclusions.
Key takeaways
The notified scheme controls eligibility
The Board may notify a scheme permitting specified classes of taxpayers to prepare and furnish returns through an authorised tax return preparer.
Companies and mandatory-audit persons are excluded
The statutory definition of specified classes excludes a company and a person whose accounts must be audited under Section 63 or another law.
Preparer must be authorised
A tax return preparer is an individual authorised under the scheme, subject to the exclusions in Section 264(2)(a).
The scheme
The Board may notify a scheme for furnishing returns of income through a tax return preparer, which may enable specified classes of persons to prepare and furnish returns through a tax return preparer authorised under the scheme. This can be made available irrespective of the provisions of Section 263.
Who is a 'tax return preparer'
A tax return preparer is any individual - other than a person referred to in Section 515(3)(a)(ii), or an employee of the specified class of persons - who has been authorised to act as such under the notified scheme.
"Specified class or classes of persons" means any person, other than a company or a person whose accounts are required to be audited under Section 63 or any other law, who is required to file a return of income under the Act.
Notification procedure
Every notification for a scheme under this section must be issued as per Section 534 of the Act.
Step-by-step flow for applying Section 264
- 1
Has the Board notified a Scheme for tax return preparers?
The Scheme is made by the Board and notified as per Section 534 (Section 264(3)).
- No: Section 264 has no practical effect until a Scheme is notified.
- Yes: Go to the next step.
- 2
Is the taxpayer in the "specified class or classes of persons"?
A person required to furnish a return under the Act, other than a company and other than a person whose accounts must be audited under Section 63 or any other law (Section 264(2)(b)).
- No: The taxpayer cannot use the Scheme.
- Yes: Go to the next step.
- 3
Is the preparer eligible?
An individual authorised under the Scheme, who is not a person referred to in Section 515(3)(a)(ii) and not an employee of the taxpayer (Section 264(2)(a)).
- No: That individual cannot act as a tax return preparer.
- Yes: Go to the next step.
- 4
Prepare and furnish the return under the Scheme
The Scheme may enable this irrespective of Section 263 (Section 264(1)(b)). Its procedure is in the Scheme, not in Section 264.
Practical checklist
Do
- Confirm that the return filer falls within the scheme’s specified eligible class.
- Use a preparer authorised under the notified scheme and retain the filed return acknowledgment.
Avoid
- Assume a company or a person subject to mandatory account audit is in the section’s eligible class.
Illustrative example
Worked example: who can use a tax return preparer
Hypothetical facts (illustration only, not a real taxpayer): Three persons want to file through a tax return preparer under a notified Scheme: (i) Mr. Sen, a salaried individual; (ii) Ms. Gill, a trader whose accounts must be audited under Section 63; and (iii) a private limited company. Mr. Sen proposes to use Mr. Roy, an individual authorised under the Scheme, who is not his employee. Facts are assumed.
Mr. Sen
He must file a return, is not a company and has no audit requirement, so he is in the specified class.
Ms. Gill
Her accounts must be audited under Section 63, so she is outside the specified class.
The company
A company is excluded from the specified class.
Mr. Roy
He is an individual authorised under the Scheme and is not Mr. Sen's employee; assuming he is not a person referred to in Section 515(3)(a)(ii), he can act as preparer.
Outcome
- Only Mr. Sen can use the Scheme, through Mr. Roy.
- The return must still be verified by the person specified in Section 265.
Frequently asked questions
Can a company use a tax return preparer under Section 264?
No - the definition of "specified class or classes of persons" specifically excludes a company, and also excludes a person whose accounts must be audited under Section 63 or any other law.
Who can act as a tax return preparer?
Any individual authorised under the Board's notified scheme, other than a person referred to in Section 515(3)(a)(ii) or an employee of the specified class of persons filing the return.
Can a person whose accounts are audited use a tax return preparer?
No. Section 264(2)(b) excludes a person whose accounts are required to be audited under Section 63 or any other law from the specified class or classes of persons.
Need help applying this provision to your situation?
Get help filing your income-tax returnLast updated 9 October 2026