Chapter XXIII - Miscellaneous
Section 532
Section 532: power to frame schemes
Section 532 is the enabling provision behind faceless and technology-driven administration under the Income-tax Act, 2025: it lets the Central Government notify schemes aimed at greater efficiency, transparency and accountability, and adapt the Act's own provisions where needed to give effect to those schemes.
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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 Central Government may, by notification, make a scheme for any of the purposes of this Act, so as to impart greater efficiency, transparency and accountability by— (a) eliminating the interface with the assessee or any other person to the extent technologically feasible; (b) optimising utilisation of the resources through economies of scale and functional specialisation.
(2) The Central Government may, for the purposes of giving effect to the scheme made under sub-section (1), by notification, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as specified in the notification.
(3) Where a scheme has been notified under the provisions of the Income-tax Act, 1961 (43 of 1961) with a view to eliminating the interface with the assessee or any other person, the Central Government may, by notification, amend or modify the said scheme as per the provisions of sub-section (1), and the provisions of sub-section (2) shall apply accordingly.
(4) Every notification issued under sub-sections (1), (2) and (3) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.
Introduction
Section 532 lets the Central Government frame notified schemes to improve efficiency, transparency and accountability, including reduced direct interface and specialised use of resources. The specific scheme and any changed application of an Act provision must be read from its notification.
Key takeaways
Scheme purpose
The Central Government may notify schemes to improve efficiency, transparency and accountability under the Act.
Technology and resources
The provision names reduced interface where technologically feasible, economies of scale and functional specialisation.
Parliamentary laying
Notifications under the section are laid before both Houses of Parliament.
Purpose of a scheme under Section 532
The Central Government may, by notification, make a scheme for any of the purposes of the Act, so as to impart greater efficiency, transparency and accountability by:
- Eliminating the interface with the assessee or any other person, to the extent technologically feasible
- Optimising utilisation of resources through economies of scale and functional specialisation
Modifying the Act to give effect to a scheme
For giving effect to a scheme made under sub-section (1), the Central Government may, by notification, direct that any provision of this Act shall not apply, or shall apply with such exceptions, modifications and adaptations as specified in the notification.
Carrying forward schemes made under the 1961 Act
Where a scheme had been notified under the Income-tax Act, 1961 with a view to eliminating interface with the assessee or any other person, the Central Government may, by notification, amend or modify that scheme under sub-section (1), and sub-section (2) applies accordingly.
Parliamentary oversight
Every notification issued under sub-sections (1), (2) and (3) must be laid before each House of Parliament, as soon as may be after it is issued.
Step-by-step flow for applying Section 532
- 1
Is the proceeding governed by a scheme notified under Section 532(1)?
A scheme may be made for any purpose of the Act to impart efficiency, transparency and accountability by eliminating the interface with the assessee or any other person (to the extent technologically feasible), or by optimising resources through economies of scale and functional specialisation.
- 2
Was the scheme originally notified under the Income-tax Act, 1961?
- Yes: Section 532(3) lets the Central Government amend or modify it by notification, and Section 532(2) applies. Section 536(2)(u) also deems such a scheme to continue. Go to the next step.
- No: Go to the next step.
- 3
Has a notification under Section 532(2) disapplied or modified any provision of the Act for the scheme?
- No: The provisions of the Act apply as they stand, along with the scheme.
- Yes: Apply the provision only with the exceptions, modifications and adaptations in the notification.
- 4
Check parliamentary laying
Every notification under Section 532(1), (2) and (3) is laid before each House of Parliament (Section 532(4)).
Practical checklist
Do
- Identify the exact scheme notification that governs the proceeding and check its effective version.
- Read any notification under sub-section (2) for the named provision, exception, modification or adaptation before applying it.
- For a scheme inherited from the 1961 Act, check whether a sub-section (3) notification has amended or modified it.
Avoid
- Do not assume that section 532 itself replaces a named assessment or appeal procedure without a relevant notification.
- Do not confuse the enabling power with the operational rules in a particular notified scheme.
Illustrative example
Worked example: a notice in a faceless proceeding
Hypothetical facts (illustration only, not a real taxpayer): An individual receives a notice through the electronic system in an assessment that is handled without personal contact with any officer. She wants to know which rules govern how she must respond.
Scheme
She identifies the scheme notified under Section 532(1) that governs the proceeding and its current version.
Modified provisions
She checks whether a Section 532(2) notification modifies any provision of the Act for that scheme, and reads the provision as modified.
Older scheme
If the scheme was first notified under the 1961 Act, she checks for any amendment under Section 532(3).
Response
She replies in the manner the scheme lays down.
Outcome
- The procedure comes from the scheme and its notifications, read with the Act.
- Section 532 is the enabling power; it does not itself set out the procedure.
Glossary
- Scheme notification
- The published instrument by which the Central Government exercises the section 532 scheme-making power.
- Adaptation
- A notified adjustment to how a provision applies for the purposes of a section 532 scheme.
Frequently asked questions
What is the purpose of a scheme framed under Section 532?
To impart greater efficiency, transparency and accountability - by eliminating the interface with the assessee where technologically feasible, and by optimising resource use through economies of scale and functional specialisation.
Can the Central Government override other provisions of the Act to implement a scheme?
Yes - Section 532(2) lets the Central Government direct, by notification, that any provision of the Act shall not apply, or shall apply with exceptions, modifications and adaptations, to give effect to a scheme.
Are notifications issued under Section 532 reviewed by Parliament?
Yes - every notification issued under Section 532(1), (2) or (3) must be laid before each House of Parliament.
Need help applying this provision to your situation?
Talk to our tax team about this sectionLast updated 9 October 2026