Chapter XX - Refunds
Section 432
Section 432: person entitled to claim refund in certain special cases
Section 432 clarifies who can claim a refund in two special situations: where one person's income is clubbed into another's total income, and where the person actually entitled to a refund cannot claim or receive it himself because of death, incapacity, insolvency, liquidation or a similar cause.
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Need advice on Section 432?
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) Where the income of one person is included in total income of any other person under any provision of this Act, the latter alone shall be eligible for a refund under this Chapter in respect of such income.
(2) Where a person is unable to claim or receive a refund due to him, on account of death, incapacity, insolvency, liquidation or other cause, his legal representative or the trustee or guardian or receiver, shall be entitled to claim or receive such refund for the benefit of such person or his estate.
Introduction
Section 432 identifies who may claim or receive a refund when the underlying income is included in someone else’s total income, or the entitled person cannot act because of death, incapacity, insolvency, liquidation or another cause.
The provision separates the person whose income arose from the person entitled to the refund claim in the stated circumstances.
Key takeaways
Income included in another person’s total income
Only that other person may claim the refund in respect of the income.
Unable to claim or receive
A legal representative, trustee, guardian or receiver may act for the person or estate when the stated obstacle applies.
Benefit remains with person or estate
The representative claim or receipt is for the benefit of the entitled person or estate.
Where income is clubbed with another person's income - Section 432(1)
"Where the income of one person is included in total income of any other person under any provision of this Act, the latter alone shall be eligible for a refund under this Chapter in respect of such income."
Where the taxpayer cannot claim the refund himself - Section 432(2)
"Where a person is unable to claim or receive a refund due to him, on account of death, incapacity, insolvency, liquidation or other cause, his legal representative or the trustee or guardian or receiver, shall be entitled to claim or receive such refund for the benefit of such person or his estate."
Applying Section 432 in practice
Whose claim? If one person's income is included in another person's total income under the Act, the latter alone claims the related refund. If the person entitled cannot claim or receive it because of death, incapacity, insolvency, liquidation or another cause, the legal representative, trustee, guardian or receiver may act for that person or estate.
Step-by-step flow for identifying the refund claimant under Section 432
- 1
Has the income of one person been included in the total income of another person under any provision of the Act?
- Yes: Under Section 432(1), only the person in whose total income it is included is eligible for a refund under this Chapter for that income. Treat that person as the claimant and go to step 2.
- No: The person to whom the refund is due is the claimant. Go to step 2.
- 2
Is the claimant unable to claim or receive the refund because of death, incapacity, insolvency, liquidation or other cause?
- No: The claimant claims and receives the refund himself.
- Yes: Go to the next step.
- 3
Identify the representative
Under Section 432(2), the legal representative, trustee, guardian or receiver is entitled to claim or receive the refund.
- 4
For whose benefit?
The representative claims or receives the refund for the benefit of the person or his estate, not in his own right.
Practical checklist
Do
- Identify whose total income includes the relevant income.
- Where a representative acts, retain documents showing status and the reason the original person cannot claim or receive the refund.
- show the inclusion of income, the claimant's legal capacity, and the tax payment or credit.
Avoid
- Do not assume the income earner always remains the person entitled to file the refund claim.
Illustrative example
Worked example: clubbed income of a minor and a later death
Hypothetical facts (illustration only, not a real taxpayer): A minor's fixed deposit earns interest, and an assumed ₹3,000 of tax is deducted on it. Under a provision of the Act the interest is included in the total income of the minor's mother, Mrs. Joshi. Separately, Mr. Sen, who was due an assumed refund of ₹18,000, dies before receiving it; his son is his legal representative.
Clubbed income
The interest is included in Mrs. Joshi's total income, so under Section 432(1) she alone is eligible for a refund in respect of that income. The minor cannot claim it separately.
Inability to claim
Mr. Sen cannot claim or receive the refund because of death.
Who claims
Under Section 432(2), his son as legal representative may claim or receive the ₹18,000.
For whose benefit
The son receives it for the benefit of Mr. Sen's estate, not in his own right.
Outcome
- Mrs. Joshi claims any refund relating to the clubbed interest.
- Mr. Sen's legal representative claims his ₹18,000 refund for the benefit of the estate.
Frequently asked questions
If my minor child's income is clubbed into mine, who claims the refund?
You do - Section 432(1) says that where one person's income is included in another person's total income under any provision of the Act, only the latter (the person in whose total income it is clubbed) is eligible for the refund on that income.
Who can claim a refund if the taxpayer has died?
The legal representative, trustee, guardian or receiver can claim or receive the refund for the benefit of the deceased person's estate, under Section 432(2), which also covers incapacity, insolvency and liquidation.
Need help applying this provision to your situation?
Get help claiming a refund on behalf of another personLast updated 10 October 2026