Section 245R of the Income-tax Act, 1961: Procedure on Receipt of an Advance Ruling Application
Updated: 27 October 2026
Section 245R of the Income-tax Act, 1961 prescribes how an application for an advance ruling is examined, admitted or rejected, heard and decided. It also provides safeguards for applicants and a statutory timetable for pronouncing a ruling. The provision must now be read with the changes introducing the Board for Advance Rulings (BAR) and the e-Advance Rulings Scheme, 2022.
What is an advance ruling?
An advance ruling is a determination on an eligible question of income-tax law or fact in relation to a transaction or other matter falling within the statutory definition in Section 245N. An applicant is a person entitled under that definition to seek a ruling. Section 245Q governs making an application, while Section 245R governs its examination and disposal.
Section 245R explained, subsection by subsection
Section 245R(1): Forwarding the application and obtaining records
On receipt of an application, the advance-ruling body forwards a copy to the jurisdictional Principal Commissioner or Commissioner of Income-tax. It may call for relevant records to verify facts and examine the questions presented. Records obtained must be returned as soon as possible.
Section 245R(2): Admission or rejection
After examining the application and available records, the body may admit or reject it by order. The statutory restrictions include questions already pending before an income-tax authority, the Appellate Tribunal or a court; questions involving determination of the fair market value of property; and questions concerning transactions or issues prima facie designed for income-tax avoidance. The statutory exceptions for specified classes of applicants must be considered rather than applying these restrictions mechanically.
Natural justice: The applicant must receive an opportunity of being heard before rejection, and the rejection order must state reasons. Admission is a preliminary decision and does not by itself decide the tax question in the applicant's favour.
Section 245R(3): Communication of the admission decision
A copy of the order allowing or rejecting the application is sent to the applicant and the Principal Commissioner or Commissioner concerned.
Section 245R(4): Consideration on merits
Once admitted, the application proceeds to substantive examination. The body considers further material submitted by the applicant or obtained in the proceedings and pronounces its ruling on the question stated in the application.
Section 245R(5): Hearing and authorised representative
On request, the applicant must be afforded a hearing before the ruling is pronounced. The applicant may act personally or through a duly authorised representative, a term interpreted by reference to Section 288(2) of the 1961 Act. Under the electronic procedure, hearings may be conducted through an electronic platform in accordance with the applicable scheme and directions.
Section 245R(6): Six-month statutory period
The provision states that the ruling is to be pronounced in writing within six months from receipt of the application. This is the period specified in the 1961 Act; the legal effect of any delay in a particular case depends on applicable law and judicial interpretation.
Section 245R(7): Signed and certified ruling
The written ruling is signed by the members, certified in the prescribed manner and communicated to the applicant and the jurisdictional Principal Commissioner or Commissioner as soon as practicable. Rule 44F deals with certification of copies in the relevant framework.
Section 245R(8): Application to the Board for Advance Rulings
Following the statutory notification, references to the Authority in Section 245R operate as references to the Board for Advance Rulings, with necessary adaptations (mutatis mutandis). Section 245-OB provides for constitution of the Board.
Sections 245R(9) to 245R(11): Electronic scheme and notifications
These provisions enable an advance-ruling scheme designed to improve efficiency, transparency and accountability through electronic interaction, functional specialisation and dynamic jurisdiction. The Central Government may issue specified adaptations within statutory limits, and notifications are to be laid before Parliament. The e-Advance Rulings Scheme, 2022 was notified on 18 January 2022.
Special withdrawal facility for transferred applications: 2024 amendment
The Finance (No. 2) Act, 2024 introduced a limited, historical withdrawal option for certain applications transferred from the former Authority to the Board. Under the proviso to Section 245Q(4), an eligible applicant could request in writing by 31 October 2024 that the transferred application not proceed, provided no order under Section 245R(2) had been passed. The corresponding proviso to Section 245R(2) permitted the Board to reject such an application as withdrawn by 31 December 2024. These deadlines have passed; they should not be mistaken for an ongoing general withdrawal window.
Practical sequence of an advance-ruling application
- Check eligibility and frame the precise question under Sections 245N and 245Q.
- Submit the application with the prescribed documents and applicable fee.
- The advance-ruling body obtains comments or records from the jurisdictional tax authority.
- Admission is examined, including statutory exclusions and any applicable exceptions.
- If rejection is proposed, the applicant is heard and a reasoned order is issued.
- If admitted, parties furnish relevant evidence and submissions, and a hearing is held where requested.
- A written ruling is pronounced and communicated in the prescribed manner.
- Consider the legal effect of the ruling under Section 245S and any appeal rights under Section 245W, where applicable.
Related provisions and definitions
| Provision | Subject | Relevance |
|---|---|---|
| Section 245N | Definitions | Defines advance ruling and eligible applicants. |
| Section 245O | Former Authority for Advance Rulings | Historical constitution of the Authority. |
| Section 245-OB | Board for Advance Rulings | Establishes the replacement institutional mechanism. |
| Section 245Q | Application | Prescribed application and withdrawal provisions. |
| Section 245S | Applicability of ruling | Addresses the legal effect of an advance ruling. |
| Section 245T | Ruling void in certain circumstances | Addresses rulings obtained through fraud or misrepresentation. |
| Section 245U | Powers | Procedural and evidentiary powers. |
| Section 245W | Appeal to High Court | Provides a statutory route for challenge to Board rulings or orders. |
Frequently asked questions
Can an application for advance ruling be rejected without a hearing?
No. Section 245R(2) requires an opportunity of being heard before rejection and requires reasons in the rejection order.
What is the statutory time limit for pronouncing a ruling?
Section 245R(6) specifies six months from the receipt of the application under the 1961 Act.
Does the Board for Advance Rulings replace the former Authority?
Yes, for the income-tax advance-ruling mechanism following the 2021 transition. The statutory references and transitional rules should be read together.
Can an applicant still use the special 2024 withdrawal facility?
No. The special request deadline was 31 October 2024; it applied only to eligible transferred applications.
Official legal sources
- Income Tax Department: Section 245R (2024 text, including later subsections)
- Income Tax Department: Section 245-OB, Board for Advance Rulings
- Income Tax Department: Handbook on Advance Rulings
- Income Tax Department: Application for Advance Rulings guidance
- Income Tax Department: Income-tax Act, 2025 transition FAQs
This article is general legal information. For a particular application, verify the applicable enactment, rules, notifications, scheme and procedural directions as of the relevant date.