Section 434

Section 434: refund for denying liability to deduct tax in certain cases

Section 434 covers a specific situation: where, under a written agreement, the person paying certain income has agreed to bear the tax deductible on it, has already deposited that tax with the Government, but now claims no tax was actually required to be deducted. It lets that person apply for a refund within a strict 30-day window.

This explanation is AI-assisted and pending review by our CA/CS team. It is general information, not professional advice - always cross-check against the bare law text above or talk to our tax team for guidance specific to your situation.

Who can apply, and the 30-day window - Section 434(1)

"Where-- (a) under an agreement or other arrangement, in writing, the tax deductible on any income, other than interest in section 393(2) (Table: Sl. No. 17), is to be borne by the person by whom the income is payable; and (b) such person having paid such tax to the credit of the Central Government claims that no tax was required to be deducted on such income, he may, within thirty days from the date of payment of such tax, file an application before the Assessing Officer for refund of such tax in such form and such manner, as may be prescribed."

Processing the application - Section 434(2) to (5)

The Assessing Officer must, by an order in writing, allow or reject the application.

No application can be rejected without giving the applicant an opportunity of being heard.

The Assessing Officer may, before passing the order, make such inquiry as he considers necessary.

The order allowing or rejecting the application must be passed within six months from the end of the month in which the application was received.

Frequently asked questions

What kind of income does Section 434 cover?

Income (other than the interest covered by Section 393(2), Table Sl. No. 17) where, under a written agreement or arrangement, the payer has agreed to bear the tax deductible on it, and has deposited that tax with the Central Government while claiming no tax was actually required to be deducted.

How long do I have to apply for a refund under Section 434?

Thirty days from the date of payment of the tax to the Central Government.

How quickly must the Assessing Officer decide the application?

Within six months from the end of the month in which the application under Section 434(1) is received, and only after giving the applicant an opportunity of being heard if the application is to be rejected.