Section 288B: Rounding Off Tax Payable and Refund Due
Section 288B of the Income-tax Act, 1961 provides a simple rule for rounding an amount payable or a refund due to the nearest multiple of Rs. 10. From 1 April 2026, Section 516 of the Income-tax Act, 2025 states the corresponding rule and also covers rounding of total income.
What does Section 288B mean?
Under Section 288B, any amount payable and any refund due under the Income-tax Act, 1961 is rounded to the nearest multiple of ten rupees. The calculation has two stages:
- Disregard paise. Remove the fractional part of the rupee without first rounding it to the next whole rupee.
- Round the remaining whole rupees. If the units digit is five or more, increase to the next multiple of ten; otherwise, reduce to the preceding multiple of ten.
The statutory language is not restricted to a particular income-tax slab or taxpayer category. It concerns the amount payable or refundable determined under the applicable Act. The underlying liability or refund must first be correctly calculated under the relevant provisions.
Examples of rounding off tax payable and refunds
| Amount before rounding | After ignoring paise | Rounded amount | Reason |
|---|---|---|---|
| Rs. 1,234.99 | Rs. 1,234 | Rs. 1,230 | Units digit is 4 |
| Rs. 1,235.01 | Rs. 1,235 | Rs. 1,240 | Units digit is 5 |
| Rs. 7,899.90 | Rs. 7,899 | Rs. 7,900 | Units digit is 9 |
| Rs. 2,560.75 | Rs. 2,560 | Rs. 2,560 | Already a multiple of ten |
| Refund of Rs. 8,124.99 | Rs. 8,124 | Refund of Rs. 8,120 | Units digit is 4 |
| Refund of Rs. 8,125.00 | Rs. 8,125 | Refund of Rs. 8,130 | Units digit is 5 |
Important: Rs. 1,234.99 becomes Rs. 1,230, not Rs. 1,240. The 99 paise is ignored before examining the last digit of the whole-rupee amount.
Section 516 of the Income-tax Act, 2025
The Income-tax Act, 2025 came into force on 1 April 2026. Its Section 516, titled Rounding off of amount of total income, or amount payable or refundable, consolidates the subjects addressed by Sections 288A and 288B of the 1961 Act.
Section 516 requires total income computed, an amount payable, or an amount refundable under the 2025 Act to be rounded to the nearest multiple of Rs. 10. It preserves the sequence of disregarding paise and then applying the five-or-more rule. The resulting rounded figure is deemed to be the relevant total income, payable amount or refundable amount for purposes of that Act.
For a historical assessment or proceeding, identify which Act and transitional provisions govern the relevant tax year rather than treating the earlier section number as the current provision for every case.
Difference between Sections 288A and 288B
| Provision | Subject | Rule |
|---|---|---|
| Section 288A, 1961 Act | Rounding off total income | Nearest Rs. 10 |
| Section 288B, 1961 Act | Rounding off amounts payable and refunds due | Nearest Rs. 10 |
| Section 516, 2025 Act | Both total income and amounts payable or refundable | Nearest Rs. 10 |
Section 288B: Original statutory provision
The following provision from the Income-tax Act, 1961 is retained for reference to the earlier law.
Any amount payable, and the amount of refund due, under the provisions of this Act shall be rounded off to the nearest multiple of ten rupees and for this purpose any part of a rupee consisting of paise shall be ignored and thereafter if such amount is not a multiple of ten, then, if the last figure in that amount is five or more, the amount shall be increased to the next higher amount which is a multiple of ten and if the last figure is less than five, the amount shall be reduced to the next lower amount which is a multiple of ten.
Legislative note: Section 288B was substituted by Act 29 of 2006, section 19, with effect from 13 July 2006. The text above reflects the wording in the uploaded original article and the Income Tax Department's published 1961 Act provision.
Frequently asked questions
What is Section 288B of the Income-tax Act, 1961?
It requires an amount payable or refund due under the 1961 Act to be rounded to the nearest multiple of Rs. 10, after ignoring paise.
What happens when the last rupee digit is five?
The amount is rounded upward to the next multiple of Rs. 10. For example, Rs. 1,235.99 becomes Rs. 1,240.
Which provision applies under the Income-tax Act, 2025?
Section 516 covers rounding of total income, amounts payable and amounts refundable to the nearest multiple of Rs. 10.
Is rounding applied to taxable income or to the tax amount?
Under the 1961 Act, Section 288A addresses total income and Section 288B addresses amounts payable or refundable. Section 516 of the 2025 Act combines both subjects.
Official statutory references
- Income Tax Department: Section 288B, Income-tax Act, 1961
- Income Tax Department: Income-tax Act, 2025 (official PDF), Section 516
- Income Tax Department: Income-tax Act, 1961, consolidated text
This article is general statutory information. For a specific return, demand or refund, refer to the applicable assessment or tax year and the governing legislation.