Chapter XXIII - Miscellaneous
Section 535
Section 535: removal of difficulties
Section 535 is a standard transitional safety-valve: if a difficulty comes up in giving effect to the Income-tax Act, 2025, the Central Government can make an order to remove it - including adapting how the old 1961 Act applies to assessments for the tax year ending 31st March, 2026 or earlier - but only within a three-year window, and every such order must be laid before Parliament.
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Need advice on Section 535?
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) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by general or special order, do anything not inconsistent with such provisions which appears to it to be necessary or expedient for the purpose of removing the difficulty.
(2) In particular, and without prejudice to the generality of the foregoing power, any order referred to in sub-section (1) may provide for the adaptations or modifications subject to which the Income-tax Act, 1961 (43 of 1961) shall apply in relation to the assessments for the tax year ending on the 31st March, 2026, or any earlier tax year.
(3) No order under sub-section (1) shall be made after the expiration of three years from the 1st April, 2026.
(4) Every order made under this section shall be laid, as soon as may be, after it is made, before each House of Parliament.
Introduction
Section 535 gives the Central Government a time-limited power to remove difficulties in implementing the 2025 Act through an order consistent with the Act.
The power can address adaptations for applying the 1961 Act to assessments for the tax year ending 31 March 2026 or an earlier year. Orders must be laid before both Houses of Parliament.
Key takeaways
Consistency limit
A difficulty-removal order cannot be inconsistent with the Act.
Earlier-year transition
Subsection (2) names adaptations concerning assessment under the 1961 Act for the specified earlier tax years.
Three-year cutoff
No subsection (1) order may be made after three years from 1 April 2026.
Parliamentary laying
Every order is to be laid before each House of Parliament.
General power to remove difficulties
"If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by general or special order, do anything not inconsistent with such provisions which appears to it to be necessary or expedient for the purpose of removing the difficulty."
Adapting the old Act for earlier tax years
In particular, such an order may provide for the adaptations or modifications subject to which the Income-tax Act, 1961 shall apply in relation to the assessments for the tax year ending on 31st March, 2026, or any earlier tax year.
Time limit and Parliamentary oversight
| Requirement | Detail |
|---|---|
| Time limit | No order under sub-section (1) can be made after the expiration of three years from 1st April, 2026 |
| Parliamentary laying | Every order made under Section 535 must be laid, as soon as may be after it is made, before each House of Parliament |
Step-by-step flow for applying Section 535
- 1
Has a difficulty arisen in giving effect to the provisions of the Act?
- No: Section 535 is not available.
- Yes: Go to the next step.
- 2
Is the proposed order within the power?
Under Section 535(1), the Central Government may by general or special order do anything not inconsistent with the Act that appears to it necessary or expedient to remove the difficulty.
- 3
Is it within the time limit?
Under Section 535(3), no order can be made after three years from 1 April 2026 have expired.
- No - the three years have expired: No order can be made under Section 535.
- Yes: Go to the next step.
- 4
Does it concern assessments under the 1961 Act?
Under Section 535(2), an order may provide adaptations or modifications subject to which the Income-tax Act, 1961 applies to assessments for the tax year ending 31 March 2026 or any earlier tax year.
- 5
Check parliamentary laying
Every order under Section 535 is laid before each House of Parliament as soon as may be (Section 535(4)).
Practical checklist
Do
- Identify the actual general or special order, the difficulty addressed and how the order remains consistent with the Act.
- Check the order date against the three-year statutory limit from 1 April 2026 and identify the relevant assessment tax year if the order adapts application of the 1961 Act.
Avoid
- Do not assume section 535 itself grants an exemption or changes a filing obligation without an applicable order.
Illustrative example
Worked example: a transition difficulty
Hypothetical facts (illustration only, not a real taxpayer): During 2027, a difficulty arises in carrying out assessments under the Income-tax Act, 1961 for the tax year ending 31 March 2026 because of the change-over to the new Act. The Central Government considers issuing an order to deal with it. The year and the difficulty are assumed for illustration.
Difficulty
The difficulty arises in giving effect to the Act's provisions on the change-over, so Section 535(1) can be used.
Content
The order may adapt or modify how the 1961 Act applies to assessments for the tax year ending 31 March 2026 (Section 535(2)), but must not be inconsistent with the Act.
Time limit
2027 is within three years from 1 April 2026, so Section 535(3) does not bar the order.
Laying
The order is laid before each House of Parliament (Section 535(4)).
Outcome
- The order can be made in 2027.
- Once the three years from 1 April 2026 have expired, no further order can be made under Section 535.
Glossary
- Removal of difficulties order
- A general or special order of the Central Government under Section 535 to remove a difficulty in giving effect to the Act.
- Income-tax Act, 1961
- The earlier Act, repealed by Section 536. Section 535(2) allows orders adapting how it applies to assessments for the tax year ending 31 March 2026 or earlier.
Frequently asked questions
How long can the Central Government use Section 535 to remove difficulties?
Only up to three years from 1st April, 2026 - no order can be made after that.
Can an order under Section 535 change how the old Income-tax Act, 1961 applies?
Yes, for assessments relating to the tax year ending 31st March, 2026, or any earlier tax year - sub-section (2) specifically allows adaptations or modifications for that purpose.
Must an order under Section 535 be laid before Parliament?
Yes - every such order must be laid before each House of Parliament as soon as may be after it is made.
Need help applying this provision to your situation?
Talk to our tax team about this sectionLast updated 10 October 2026