Sections 516 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.
Sections 516 to 521 of the Income-tax Act, 2025 are six short provisions with different purposes. Section 516 fixes how total income and amounts payable or refundable are rounded to the nearest ten rupees; section 517 requires a receipt for money paid or recovered; section 518 protects those who deduct tax; section 519 lets the Central Government offer immunity from prosecution; section 520 names the lowest court that can try offences; and section 521 excludes probation provisions.
This explanation is as per the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026. Under section 1(3) the Act came into force on the 1st April, 2026, save as otherwise provided. Later amendments, rules and notifications should be checked.
Total income and every amount payable or refundable is rounded to the nearest multiple of Rs. 10, after ignoring paise: a last figure of five or more rounds up, less than five rounds down. A receipt must be given for money paid or recovered. A person who deducts, retains or pays tax for another is indemnified. Immunity from prosecution and penalty can be tendered for a full and true disclosure. No court inferior to a Judicial Magistrate of the first class may try an offence. Probation provisions do not apply unless the convict is under eighteen. Return preparation questions can go to our income tax return filing team.
Section 516: rounding off
The amount of total income computed, or any amount payable or refundable under the Act, is rounded off to the nearest multiple of Rs. 10 (printed "` 10"), ignoring any part of a rupee consisting of paise. Then, if the amount is not a multiple of ten:
- (a) it is increased to the next higher multiple of ten if the last figure is five or more; or
- (b) it is reduced to the next lower multiple of ten if the last figure is less than five.
The rounded amount is deemed to be the total income of the assessee, or the amount payable or refundable, as the case may be.
| Amount (assumed) | Paise ignored | Last figure | Result |
|---|---|---|---|
| Rs. 5,43,217.65 | Rs. 5,43,217 | 7 (five or more) | Rs. 5,43,220 |
| Rs. 5,43,212.90 | Rs. 5,43,212 | 2 (less than five) | Rs. 5,43,210 |
| Rs. 5,43,215.10 | Rs. 5,43,215 | 5 (five or more) | Rs. 5,43,220 |
| Rs. 5,43,220.99 | Rs. 5,43,220 | 0 (a multiple of ten) | Rs. 5,43,220 |
The paise are dropped first, not rounded: Rs. 5,43,212.90 does not become Rs. 5,43,213 before rounding. The rule applies to total income and to any amount payable or refundable under the Act, such as tax or a refund as computed. The section itself speaks of "any amount payable or refundable", so check the surrounding provisions for the order in which other computations are made.
Section 517: receipt to be given
A receipt shall be given for any money paid or recovered under the Act. The section does not say who gives it, in what form, or what happens if it is not given; it is silent on those points.
Section 518: indemnity
Every person deducting, retaining or paying any tax in pursuance of the Act in respect of an income belonging to another person shall be indemnified for the deduction, retention or payment. This protects a deductor, such as an employer or payer, against the person from whose income the tax was deducted. The obligation to deduct itself is dealt with in the Chapter on collection and recovery; see our note on section 393.
Section 519: power to tender immunity from prosecution
Sub-section (1): the offer
The Central Government may, if it is of the opinion that it is necessary or expedient, for reasons recorded in writing, tender to a person appearing to have been directly or indirectly concerned in, or privy to, the concealment of income or the evasion of payment of tax on income, for obtaining his evidence:
- (a) immunity from prosecution for any offence under the Act, under the Bharatiya Nyaya Sanhita, 2023 (45 of 2023) or under any other Central Act in force; and
- (b) immunity from imposition of any penalty under the Act,
on condition of his making a full and true disclosure of the whole circumstances relating to the concealment of income or evasion of tax.
Sub-section (2): effect of acceptance
A tender of immunity made to and accepted by the person concerned renders him immune, to the extent the immunity extends, from prosecution for the offence in respect of which it was made, or from imposition of the penalty.
Sub-sections (3) and (4): withdrawal
If it appears to the Central Government that the person has not complied with the conditions, is wilfully concealing anything, or is giving false evidence, it may record a finding to that effect and the immunity is then deemed withdrawn. The person may then be tried for the offence in respect of which immunity was tendered, or for any other offence of which he appears guilty in connection with the same matter, and becomes liable to any penalty he would otherwise have been liable to.
Section 520: cognizance of offences
No court inferior to that of a Judicial Magistrate of the first class shall try any offence under the Act. For the Special Courts that can be designated for Chapter XXII offences, see our note on sections 495 to 498.
Section 521: Probation of Offenders Act, 1958 and section 401 of the Sanhita not to apply
The provisions of the Probation of Offenders Act, 1958 (20 of 1958) and section 401 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023) shall not apply to a person convicted of an offence under the Act unless that person is under eighteen years of age. These are other laws; check them separately.
| Section | Subject | Key point |
|---|---|---|
| 516 | Rounding off | Nearest multiple of Rs. 10 after ignoring paise; five or more up, less than five down |
| 517 | Receipt | Given for any money paid or recovered |
| 518 | Indemnity | For persons deducting, retaining or paying tax on another's income |
| 519 | Immunity | Central Government, for reasons in writing, on full and true disclosure |
| 520 | Trial court | Not inferior to a Judicial Magistrate of the first class |
| 521 | Probation provisions | Do not apply unless the convict is under eighteen |
A worked example (names and amounts assumed)
Ms. Divya's computed total income for a tax year is Rs. 7,86,444.50, and the tax payable computed at the rates in force for her is Rs. 33,265.40. (The amounts are assumed.)
- Total income: ignore the paise to get Rs. 7,86,444; the last figure is 4, less than five, so it is reduced to Rs. 7,86,440. This rounded amount is deemed to be her total income.
- Tax payable: ignore the paise to get Rs. 33,265; the last figure is 5, so it is increased to Rs. 33,270, which is deemed to be the amount payable.
- When she pays the amount, section 517 requires that a receipt be given for the money paid.
- Her employer, who deducted tax from her salary, is indemnified by section 518 for the deduction.
Need help with your return?
The rounding rule is applied to the figures in a return and to the tax payable or refundable, so a difference of a few rupees between two workings can come from where the rounding was applied. Our income tax return filing team can prepare and check your figures.
Key takeaways
- Total income and amounts payable or refundable are rounded to the nearest multiple of Rs. 10, ignoring paise (section 516).
- A last figure of five or more is rounded up; less than five is rounded down.
- A receipt must be given for any money paid or recovered (section 517).
- A person deducting, retaining or paying tax on another's income is indemnified (section 518).
- Immunity from prosecution and penalty may be tendered on full and true disclosure, and is deemed withdrawn on breach of conditions (section 519).
- No court inferior to a Judicial Magistrate of the first class may try an offence under the Act (section 520).
- The probation provisions apply only to a convict under eighteen (section 521).
Read next
- Section 515: appearance by authorised representative
- Sections 522 to 526: defects that do not invalidate proceedings and related provisions
- Section 266: self-assessment
- Chapter XXIII guide: miscellaneous provisions
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.