Chapter XX - Refunds
Section 431
Section 431: refunds
Section 431 opens the refunds Chapter with the basic entitlement: if the tax a person has paid (or that is treated as paid on his behalf) for a tax year exceeds what he is properly chargeable with for that year, he is entitled to a refund of the excess.
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Need advice on Section 431?
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
If any person satisfies the Assessing Officer that the amount of tax paid by him or on his behalf or treated as paid by him or on his behalf for any tax year exceeds the amount with which he is properly chargeable under this Act for that year, he shall be entitled to a refund of the excess.
Introduction
A refund under section 431 depends on satisfying the Assessing Officer that tax paid or treated as paid for a tax year exceeds the amount properly chargeable for that year. The entitlement is to the excess amount.
Key takeaways
Comparison for one tax year
Compare paid or deemed-paid tax with the amount properly chargeable for the same tax year.
Assessing Officer
The person must satisfy the Assessing Officer of the excess.
What Section 431 says
"If any person satisfies the Assessing Officer that the amount of tax paid by him or on his behalf or treated as paid by him or on his behalf for any tax year exceeds the amount with which he is properly chargeable under this Act for that year, he shall be entitled to a refund of the excess."
When this provision applies
Reconcile payments and credits with the amount properly chargeable for the same tax year. The comparison includes tax paid personally, paid on the person’s behalf or treated as paid, but each credit must be attributable to the correct person and year under the applicable rules.
A claimed refund needs a supported computation. A credit statement entry, an advance-tax payment or a deduction by another person does not alone establish the final amount properly chargeable. Reconcile the return and any assessment or intimation with the payment evidence.
Limits and procedural safeguards
The refund entitlement is to the excess, not automatically to all tax paid. Section 431 does not prescribe a universal processing date or itself calculate interest; those questions require the relevant procedural and interest provisions.
Section 436 limits attempts to use a refund claim to reopen an assessment or other matter that has become final and conclusive. Identify the proper remedy for a disputed liability rather than treating the refund route as an unrestricted review procedure.
Step-by-step review
1. Identify the claimant and tax year and compile the eligible tax-payment and credit records.
2. Prepare the correctly chargeable tax computation for that year.
3. Reconcile payments or deemed payments with that liability and explain any mismatch.
4. Use the applicable refund route and retain the filed claim or consequential order and resulting refund record.
Hypothetical example
Hypothetical illustration: verified tax paid or treated as paid for a year is ₹80,000 and the amount properly chargeable is ₹65,000. The excess is ₹15,000, subject to satisfying the Assessing Officer and applying the relevant refund procedure. This computation does not determine interest or an automatic payment date.
Records to prepare
Return, tax computation and relevant assessment or intimation.
Payment challans, deduction or collection records and eligible credit reconciliation.
Refund claim or consequential order, acknowledgement and refund record.
Official amended Act source
Step-by-step flow for a refund under Section 431
- 1
Which tax year is involved?
The comparison is made year by year: tax for one tax year is compared with the liability for that same year.
- 2
Total the tax paid or treated as paid for that year
Include tax paid by the person or on his behalf, and tax treated as paid by him or on his behalf.
- 3
Determine the amount with which the person is properly chargeable under the Act for that year
- Tax paid or treated as paid does not exceed the proper charge: No refund arises under Section 431.
- It exceeds the proper charge: Go to the next step.
- 4
Satisfy the Assessing Officer
The person must satisfy the Assessing Officer of the excess. He is then entitled to a refund of the excess only, not of the whole tax paid. The claim is made by furnishing a return under section 263 (Section 433).
Practical checklist
Do
- Reconcile tax paid personally, paid on the claimant’s behalf and tax treated as paid on the claimant’s behalf for the tax year.
- Compare that total with the amount properly chargeable and retain material that satisfies the Assessing Officer of the excess.
- Return, tax computation and relevant assessment or intimation.
- Payment challans, deduction or collection records and eligible credit reconciliation.
- Refund claim or consequential order, acknowledgement and refund record.
Avoid
- Do not claim the entire amount paid as a refund when only the excess over proper chargeability is refundable.
Illustrative example
Worked example: excess tax deducted from salary
Hypothetical facts (illustration only, not a real taxpayer): For the tax year 2026-27, Ms. Pillai's employer deducted tax of ₹85,000 from her salary and she paid advance tax of ₹40,000. The amount with which she is properly chargeable under the Act for the year is assumed to be ₹1,02,500. All amounts are assumed.
Tax paid and treated as paid
₹85,000 + ₹40,000 = ₹1,25,000.
Proper charge
Assumed liability for the year: ₹1,02,500.
Excess
₹1,25,000 − ₹1,02,500 = ₹22,500.
Claim
She claims the refund by furnishing her return under section 263, and must satisfy the Assessing Officer that the excess exists.
Outcome
- She is entitled to a refund of ₹22,500, the excess only.
- Any interest on the refund is a separate question under section 437.
Glossary
- Excess tax
- The amount by which qualifying payments or deemed payments exceed the tax properly chargeable for the relevant year.
Frequently asked questions
Does Section 431 allow a refund of the whole tax paid?
It entitles the person to a refund of the excess over the amount properly chargeable for that tax year.
When am I entitled to a refund under Section 431?
When you satisfy the Assessing Officer that the tax paid by you or on your behalf (or treated as paid) for a tax year exceeds the amount you are properly chargeable with under the Act for that year.
Does Section 431 cover tax deducted at source or treated as paid, not just tax actually paid by me?
Yes - the section covers tax "paid by him or on his behalf or treated as paid by him or on his behalf", so it is not limited to amounts you personally remitted.
Does a tax-credit entry alone establish the final refund?
No. Reconcile the credit with the correctly chargeable tax and the applicable person-and-year credit rules.
Can a refund claim freely reopen a final assessment?
No. Section 436 restricts questioning an assessment or other matter that has become final and conclusive through this refund claim route.
Need help applying this provision to your situation?
Get help claiming your income tax refundLast updated 10 October 2026