Section 296 of the Income-tax Act, 1961: Rules and Notifications to Be Placed Before Parliament

What does laying rules before Parliament mean?

Delegated legislation means legally binding rules or notifications issued under powers conferred by an Act of Parliament. A laying requirement directs the Government to place specified instruments before the Lok Sabha and the Rajya Sabha so that both Houses may examine them. This is distinct from requiring prior parliamentary approval for each rule.

The Central Board of Direct Taxes (CBDT) is the Board that exercises statutory rule-making powers under the income-tax legislation, subject to the control of the Central Government. The relevant rule-making provision is Section 295 of the 1961 Act, corresponding broadly to Section 533 of the 2025 Act.

Section 296 of the Income-tax Act, 1961: scope and explanation

Under Section 296, the Central Government was required to lay before each House of Parliament every rule made under the Act, specified rules of procedure and designated notifications. The uploaded historical text specifically mentions procedural rules of the Settlement Commission under Section 245F(7), the Authority for Advance Rulings under Section 245V, and the Appellate Tribunal under Section 255(5), together with certain notifications under Sections 10(23C), 139(1C), 153A and 153C.

Some bodies and procedures mentioned in older versions were subsequently restructured or discontinued. Accordingly, those references must be read in the context of the version of the 1961 Act applicable to the relevant period, rather than assumed to describe institutions presently operating in the same form.

Core safeguards

• Specified rules and notifications must be laid before both Houses while Parliament is in session.
• The total laying period is 30 days, which may extend across successive sessions.
• If both Houses agree on a modification or annulment within the statutory time, the instrument thereafter operates in modified form or ceases to have effect.
• Earlier valid acts under that instrument are expressly protected from being invalidated solely by that later modification or annulment.

Section 534 of the Income-tax Act, 2025

Section 534, titled Laying before Parliament, is the corresponding provision under the current Act. It directs the Central Government to lay the following before both Houses:

1. Every rule made under the Income-tax Act, 2025.
2. Rules of procedure framed by the Appellate Tribunal under Section 364.
3. Notifications issued under Sections 263(3) and 264 and Chapter XIII-G.

The statutory review mechanism remains substantially similar: 30 days of laying, a decision by both Houses within the prescribed parliamentary-session period, prospective operation of any modification or annulment, and protection of actions already taken. Not every departmental circular or administrative communication is automatically subject to Section 534; its scope depends on the classes of instruments identified by law.

For the enacted and updated statutory text, refer to the Income-tax Act, 2025, as amended by the Finance Act, 2026 (official PDF).

How does the 30-day laying procedure work?

Illustration: If a tax rule is issued and later modified by agreement of both Houses in accordance with Section 534, the modified rule governs thereafter. Transactions validly completed under the earlier rule are not rendered invalid merely because Parliament modified it.

Section 296 and Section 534: comparison

Effect of repeal and transitional provisions

Section 536 of the Income-tax Act, 2025 contains repeal and savings provisions. It is important when determining how pre-commencement rules, notifications, proceedings and other actions under the 1961 Act continue or are treated under the new legislation. Whether a particular instrument remains operative must be assessed against the relevant savings clause and any replacement, amendment or inconsistency with the 2025 Act.

Readers should distinguish the Act's tax year terminology from the earlier assessment-year framework when applying provisions across the 1 April 2026 transition.

Frequently asked questions

Does every income-tax rule need to be passed as a separate Act?

No. The statute delegates rule-making authority. Section 534 requires parliamentary laying and provides a mechanism for modification or annulment by agreement of both Houses.

Is the 30-day period necessarily 30 consecutive calendar days?

No. The provision permits the period to be made up within one parliamentary session or across two or more successive sessions.

Can one House alone annul a rule under Section 534?

The statutory mechanism requires agreement of both Houses for modification or annulment.

Does a later annulment automatically invalidate actions already taken?

No. The provision expressly protects the validity of anything previously done under the rule or notification.

Which provision applies after 1 April 2026?

Section 534 of the Income-tax Act, 2025 is the current counterpart. Section 296 remains relevant to historical instruments and matters governed by the 1961 Act's saved operation.

Official legislation and references

• Income-tax Act, 2025, as amended by Finance Act, 2026 - official text
• Income Tax Department - 2025 Act, Rules and section comparison tools
• Income Tax Department - Section 296 of the 1961 Act (historical version)
• Income Tax Department - transition and savings guidance

This article explains the law for general information. The text of the applicable Act, notifications and rules should be checked for the relevant date and facts.