Sections 431 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Chapter XX of the Income-tax Act, 2025 deals with refunds. Its first six sections say when a refund is due, who is eligible to claim it, how the claim is made, what happens when tax was paid by a payer who says he was not bound to deduct it, when a refund follows an appeal without a claim, and what the assessee cannot argue in a refund claim. This article follows the text as per the Income-tax Act, 2025 as amended by the Finance Act, 2026. If you are expecting a refund, our income tax return filing service can help you claim it. For the earlier Act's corresponding provisions, see our note on where the earlier Act's refund provisions sit in the 2025 Act.
A person who satisfies the Assessing Officer that the tax paid or treated as paid exceeds the tax properly chargeable for a tax year is entitled to a refund of the excess (section 431). The claim is made by furnishing a return under section 263 (section 433). A payer who bore the tax under an agreement and claims no tax was due may apply within thirty days of paying it (section 434). A refund arising from an appeal order is made without a claim (section 435). In a refund claim, the correctness of a final assessment cannot be questioned (section 436).
Section 431: the right to a refund
Section 431: 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 the Act for that year, he shall be entitled to a refund of the excess.
Three elements stand out.
- The burden is on the person: he must "satisfy" the Assessing Officer.
- Tax "paid ... or treated as paid" is wide. It takes in tax paid by or for him, which includes tax deducted or collected at source and advance tax, because those are paid on his behalf or treated as paid by him.
- The refund is of the excess over what he is "properly chargeable" with, so it is a comparison of tax paid against tax chargeable for that tax year.
Example (amounts assumed). For a tax year, tax of Rs. 62,000 has been paid by or on behalf of Farida (advance tax and tax deducted at source) while she is properly chargeable with Rs. 48,000. She satisfies the Assessing Officer of this. She is entitled to a refund of Rs. 62,000 - Rs. 48,000 = Rs. 14,000.
Section 432: who is entitled to claim
| Sub-section | Rule |
|---|---|
| (1) | Where the income of one person is included in the total income of another person under any provision of the Act, the latter alone is eligible for a refund under the 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, guardian or receiver, is entitled to claim or receive it for the benefit of such person or his estate |
Sub-section (1) means that where income is clubbed with another person's total income, only that other person can claim the refund on it. Sub-section (2) names the persons who step in. The words "or other cause" make the list open. Check the Act's clubbing provisions (Chapter V) for when income of one person is included in another's.
Example (facts assumed). Mr. Menon's income is, under a provision of the Act, included in the total income of his father. Any refund in respect of that income goes to the father alone. If the father dies before receiving it, his legal representative may claim or receive it for the benefit of his estate.
Section 433: the claim is made by a return
Section 433 is a single sentence: every claim for refund under the Chapter shall be made by furnishing a return as per section 263. The heading of the section speaks of "limitation", but the text of section 433 prints no time limit; any time for furnishing the return is found in section 263. For the return provisions, see our Chapter XV guide.
Section 434: refund where tax was borne by the payer
Sub-section (1) applies where:
- under an agreement or other arrangement in writing, the tax deductible on any income, other than interest in section 393(2) (Table: serial number 17), is to be borne by the person by whom the income is payable; and
- that person, having paid such tax to the credit of the Central Government, claims that no tax was required to be deducted on the income.
He may, within thirty days from the date of payment of the tax, file an application before the Assessing Officer for refund of the tax, in such form and manner as may be prescribed. The form and manner are left to the Income-tax Rules, 2026.
| Sub-section | Rule |
|---|---|
| (2) | The Assessing Officer shall, by an order in writing, allow or reject the application |
| (3) | No application shall be rejected unless an opportunity of being heard has been given |
| (4) | Before passing the order, the Assessing Officer may make such inquiry as he considers necessary |
| (5) | The order shall be passed within six months from the end of the month in which the application is received |
Example (amounts and dates assumed). Sagar Builders agreed in writing to bear the tax on a payment to a consultant, so that the consultant would receive the agreed sum without any deduction from it; Sagar pays Rs. 10,000 of tax to the Central Government on 5 May and then concludes that no tax was required to be deducted. It must apply within thirty days, that is by 4 June. If the application is received in the month of June, the order must be passed within six months from the end of June.
Section 435: refund on appeal
Under sub-section (1), where, as a result of any order passed in an appeal or other proceeding under the Act, a refund of any amount becomes due to the assessee, the Assessing Officer shall, except as otherwise provided in the Act, refund the amount to the assessee without his having to make any claim.
Sub-section (2) sets two timing rules for orders under sub-section (1):
| Clause | Order | When refund is due |
|---|---|---|
| (a) | An assessment is set aside or cancelled and a fresh assessment is directed | Only on the making of such fresh assessment |
| (b) | The assessment is annulled | Only of the amount, if any, of the tax paid in excess of the tax chargeable on the total income returned by the assessee |
Example (amounts assumed). An appeal order sets aside Ganesh's assessment and directs a fresh one. Tax of Rs. 75,000 was paid on the earlier assessment. No refund is due yet; it becomes due only when the fresh assessment is made (clause (a)). If instead the assessment is annulled, the refund is only of tax paid in excess of the tax on the total income he returned, say Rs. 30,000 of tax on returned income gives a refund of Rs. 75,000 - Rs. 30,000 = Rs. 45,000.
Section 436: what a refund claim cannot reopen
In a claim under the Chapter, it is not open to the assessee to question the correctness of any assessment, or other matter decided which has become final and conclusive, or to ask for a review of that assessment or matter. The assessee is not entitled to any relief on such a claim except refund of tax wrongly paid or paid in excess.
So a refund claim cannot be used as a second appeal. A final assessment stays as it is; the claim can only recover tax that was paid in excess of or wrongly beyond what the final position supports.
How the six sections fit
| Section | Question | Answer |
|---|---|---|
| 431 | When is a refund due? | When tax paid or treated as paid exceeds the tax properly chargeable |
| 432 | Who may claim? | The person whose total income includes the income; legal representative, trustee, guardian or receiver in cases of incapacity |
| 433 | How? | By furnishing a return as per section 263 |
| 434 | What if the payer bore the tax but says none was due? | Application within thirty days; order within six months from the end of the month of receipt |
| 435 | Is a claim needed after an appeal? | No |
| 436 | Can a refund claim reopen a final assessment? | No |
Interest on refunds is in section 437 and set-off in section 438; see our article on sections 437 and 438. For the Chapter-level overview see the Chapter XX guide.
Need help claiming a refund?
A refund depends on the return, on matching tax deducted and paid, and on the dates in the Act. Our income tax return filing team prepares the return, checks that every payment is credited and follows up where an application under section 434 is also needed.
Key takeaways
- A person is entitled to a refund of the excess where tax paid or treated as paid exceeds the tax properly chargeable (section 431).
- Where income is included in another person's total income, only that person can claim the refund on it.
- A legal representative, trustee, guardian or receiver may claim for a person unable to do so.
- The claim is made by furnishing a return as per section 263.
- A payer who bore the tax under a written agreement and says no tax was due has thirty days to apply; the order is due within six months from the end of the month of receipt.
- A refund following an appeal order is made without a claim, but only on the timing rules in section 435(2).
- A refund claim cannot reopen a final assessment (section 436).
Read next
- Sections 437 and 438: interest on refunds and set-off or withholding of refunds
- Section 423: interest for default in furnishing return of income
- Section 267: updated return
- Chapter XX: refunds
Disclaimer: Based on the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026, as consulted on 2 October 2026. It explains the words of the Act only; the Income-tax Rules, 2026, notifications, circulars, later amendments and the way the tax authorities and courts apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.