Sections 527 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 527 to 531 of the Income-tax Act, 2025 give the Central Government and the Board a set of residual powers: to modify tax for persons in mineral oil business, to condone delay in obtaining an approval, to withdraw an approval, to let the Act operate until a charging Act is passed, and to rescind certain earlier exemptions.
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.
The Central Government may, by notification, exempt, reduce the rate of, or otherwise modify tax for persons in the mineral oil business and their employees (section 527). The Central Government or the Board may condone, for sufficient cause, delay in obtaining an approval (section 528) and may withdraw an approval after recording reasons and giving a hearing (section 529). If no charging Act is in place on 1 April, the Act applies on the more favourable of the preceding year's provision or the Bill (section 530). Section 531 allows rescinding an exemption granted under section 294A of the Income-tax Act, 1961. For approval-related questions, see our legal consultation support.
Section 527: mineral oils
Sub-section (1): the power
If the Central Government is satisfied that it is necessary or expedient in the public interest, it may, by notification, make an exemption, reduction in rate or other modification of income-tax for any class of persons specified in sub-section (2), or in regard to the whole or any part of their income, or the status in which they or their members are to be assessed on income from the business referred to in sub-section (2)(a). It is stated to be effective from a tax year beginning on or after the 1st April, 1992, as printed.
Sub-section (2): the persons
- (a) persons with whom the Central Government has entered into agreements for the association or participation of that Government, or any person authorised by it, in any business of prospecting for or extraction or production of mineral oils;
- (b) persons providing any services or facilities, or supplying any ship, aircraft, machinery or plant (by sale or hire), for any such business carried on by that Government or any person it specifies by notification; and
- (c) employees of the persons in (a) or (b).
Sub-sections (3) and (4)
Every notification under the section shall be laid before each House of Parliament. "Mineral oil" includes petroleum and natural gas. "Status" means the category of person as defined in section 2(77) under which the assessee is assessed. Which notifications have been issued is not in the text consulted.
Section 528: condonation of delay in obtaining approval
Where the approval of the Central Government or the Board is required to be obtained before a specified date under the Act, it is open to the Central Government or the Board to condone, for sufficient cause, any delay in obtaining such approval.
Points to note from the words of the section:
- It applies only to approvals of the Central Government or the Board, not to approvals of other income-tax authorities.
- The ground is sufficient cause; the Act does not define the term.
- The power is to condone a delay in obtaining the approval, where the approval must be obtained before a specified date.
Section 529: power to withdraw approval
Where the Central Government, the Board or an income-tax authority has the power to grant any approval under any provision of the Act to any assessee, it may withdraw that approval at any time, after recording the reasons, even if the provision does not specifically allow for withdrawal, and after giving the assessee a reasonable opportunity of being heard.
The three safeguards are therefore: reasons recorded, an opportunity of being heard, and the fact that the power exists for approvals the authority can grant. Where a particular provision, such as the registration of a non-profit organisation, has its own rules on cancellation, read that provision as well; for the registration provision see our note on section 332.
Section 530: the Act to have effect pending legislative provision for charge of tax
If on the 1st April in any tax year, provision has not yet been made by a Central Act for the charging of income-tax for that tax year, the Act nevertheless has effect until such provision is made, as if the provision in force in the preceding tax year or the provision proposed in the Bill then before Parliament, whichever is more favourable to the assessee, were actually in force.
For the charge of tax in the Act itself, see our note on section 4.
Section 531: rescinding exemptions granted under section 294A of the Income-tax Act, 1961
Where the Central Government considers it necessary or expedient, it may, by general or special order, rescind an exemption, reduction in rate or other modification in respect of income-tax or super-tax, in favour of any assessee or class of assessees, or in regard to the whole or any part of their income, made as per the provisions of section 294A of the Income-tax Act, 1961 (43 of 1961). The heading refers to certain Union territories; the operative sentence names section 294A. The reference is quoted as printed and nothing more is said here about the earlier Act. The sentence in the copy consulted is not grammatically complete (it lacks a subject before "may"); it is flagged as a drafting slip and not corrected.
| Section | Power | Who exercises it | Safeguard or limit |
|---|---|---|---|
| 527 | Exempt, reduce rate or modify tax for mineral oil business persons and employees | Central Government, by notification | Public interest; laid before Parliament |
| 528 | Condone delay in obtaining approval | Central Government or the Board | Sufficient cause |
| 529 | Withdraw an approval | Central Government, the Board or the income-tax authority that can grant it | Reasons recorded; reasonable opportunity of being heard |
| 530 | Act to have effect pending a charging Act | Operates by law on 1 April | More favourable of preceding year's provision or the Bill |
| 531 | Rescind exemption made under section 294A of the 1961 Act | Central Government, by general or special order | Necessary or expedient |
A worked example (names assumed)
Harbour Energy Services Private Limited supplies a drilling rig on hire to a Government-associated mineral oil operator. (All names and facts are assumed.)
- Under section 527(2)(b), such a supplier is within the class of persons for whom the Central Government may notify an exemption, reduction in rate or other modification. Whether any notification applies to it is not stated in the Act.
- Suppose a provision of the Act requires an approval of the Board to be obtained before a specified date and Harbour obtains it late for a good reason. Section 528 lets the Board condone the delay for sufficient cause.
- If an approval already granted is later withdrawn by the authority that granted it, section 529 requires the reasons to be recorded and a reasonable opportunity of being heard to be given.
- If on the 1st April of a tax year no charging Act has been passed, section 530 applies the preceding year's provision or the Bill's, whichever is more favourable to Harbour as an assessee.
Need help with an approval or exemption question?
If your position depends on an approval, a delay in obtaining it, or an exemption notified for a class of persons, the words of the provision and the notification must be read together. Our legal consultation team can help you assess the position.
Key takeaways
- The Central Government may notify exemptions, rate reductions or other modifications for mineral oil business persons and their employees (section 527).
- The Central Government or the Board may condone delay in obtaining an approval for sufficient cause (section 528).
- An approval may be withdrawn at any time after recording reasons and giving a hearing, even if the provision does not allow withdrawal (section 529).
- If no charging Act is in place on 1 April, the more favourable of the preceding year's provision or the Bill applies (section 530).
- Section 531 lets the Central Government rescind exemptions made under section 294A of the 1961 Act, quoted as printed.
Read next
- Sections 522 to 526: defects that do not invalidate proceedings and related provisions
- Sections 532 to 535: schemes, rules, laying before Parliament and removal of difficulties
- Section 4: the charging section
- 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.