Section 298 of the Income-tax Act, 1961: Power to Remove Difficulties
Section 298 empowered the Central Government to address practical difficulties in implementing the Income-tax Act, 1961 without acting inconsistently with the Act. From 1 April 2026, the corresponding provision is Section 535 of the Income-tax Act, 2025.
Section 298: Original statutory provisions under the 1961 Act
The following reproduces the four substantive subsections contained in the original webpage, with punctuation and paragraphing regularised for readability.
Section 298 - Power to remove difficulties
(1) If any difficulty arises in giving effect to the provisions of this Act the Central Government may, by general or special order, do anything not inconsistent with such provisions which appears to it to be necessary or expedient for the purpose of removing the difficulty.
(2) In particular, and without prejudice to the generality of the foregoing power, any such order may provide for the adaptations or modifications subject to which the repealed Act shall apply in relation to the assessments for the assessment year ending on the 31st day of March, 1962, or any earlier year.
(3) If any difficulty arises in giving effect to the provisions of this Act as amended by the Direct Tax Laws (Amendment) Act, 1987, the Central Government may, by order, do anything not inconsistent with such provisions for the purpose of removing the difficulty:
Provided that no such order shall be made after the expiration of three years from the 1st day of April, 1988.
(4) Every order made under sub-section (3) shall be laid before each House of Parliament.
Meaning, definitions and scope of Section 298
What is a removal-of-difficulties provision?
It is a statutory mechanism enabling the Government to issue an implementing order where a practical or transitional problem arises in applying legislation. It does not confer an unrestricted power to rewrite the statute or override an express provision.
What is a general or special order?
A general order may address a class of cases, while a special order may address a specified situation. In either case the action must remain consistent with the governing Act and be directed towards removing an implementation difficulty.
What did subsection (2) address?
It dealt with the transition from the Indian Income-tax Act, 1922 to the Income-tax Act, 1961, particularly assessments for the assessment year ending on 31 March 1962 or earlier. The expression repealed Act referred to the Indian Income-tax Act, 1922, as addressed by Section 297 (repeals and savings).
What did subsections (3) and (4) address?
Subsection (3) related specifically to implementation difficulties following the Direct Tax Laws (Amendment) Act, 1987. It prohibited new orders under that subsection after the three-year period beginning 1 April 1988. Subsection (4) required orders under subsection (3) to be placed before both Houses of Parliament. That historical time limit is not the same as the new 2025 Act deadline.
Section 535 of the Income-tax Act, 2025: Current law
Section 535, headed Removal of difficulties, is the corresponding provision in the Income-tax Act, 2025 (Act 30 of 2025). Its operative elements are:
- Section 535(1): The Central Government may make a general or special order to remove a difficulty in giving effect to the Act, provided the order is not inconsistent with its provisions.
- Section 535(2): Such an order may provide adaptations or modifications concerning application of the Income-tax Act, 1961 to assessments for the tax year ending 31 March 2026 or an earlier tax year.
- Section 535(3): No order under subsection (1) may be made after the expiry of three years from 1 April 2026.
- Section 535(4): Every order under Section 535 must be laid, as soon as may be after it is made, before each House of Parliament.
Read Section 535 in the official Income-tax Act, 2025 (PDF). For transitional matters, also examine Section 536 on repeal and savings.
Section 298 and Section 535: Key differences
| Issue | Section 298, 1961 Act | Section 535, 2025 Act |
|---|---|---|
| Primary purpose | Remove implementation difficulties under the 1961 Act | Remove implementation difficulties under the 2025 Act |
| Historical transition | 1922 Act assessments for 1961-62 or earlier | 1961 Act assessments for tax year ending 31 March 2026 or earlier |
| Special time limit | 1987 amendment-related orders limited to three years from 1 April 1988 | All Section 535(1) orders limited to three years from 1 April 2026 |
| Parliamentary laying | Orders under subsection (3) | Every order under Section 535 |
Practical implications for taxpayers and professionals
- Identify the applicable tax year before relying on a removal-of-difficulties order.
- Check whether the order is authorised by the applicable statute and remains within its stated limits.
- Do not treat a removal-of-difficulties order as an independent power to impose a tax or disregard a substantive statutory right.
- For proceedings concerning periods before 1 April 2026, consider the saving and transitional provisions in Section 536 of the 2025 Act.
- Consult the actual Gazette order and its date before applying any adaptation to a return, assessment, appeal or other proceeding.
Frequently asked questions
Is Section 298 still the operative removal-of-difficulties provision?
No. For the Income-tax Act, 2025, the corresponding operative provision is Section 535 from 1 April 2026. Section 298 remains relevant for historical interpretation and saved matters under the former law.
Can the Central Government amend tax rates through a Section 535 order?
The power is confined to resolving implementation difficulties through orders that are not inconsistent with the Act. It should not be understood as a general power to amend substantive tax legislation.
What is the last date for making orders under Section 535?
Section 535(3) states that no order under subsection (1) may be made after the expiration of three years from 1 April 2026. The precise statutory language governs the deadline.
Must a Section 535 order be placed before Parliament?
Yes. Section 535(4) requires every order made under the section to be laid before each House of Parliament as soon as may be after it is made.
Official sources and further reading
- Income Tax Department: Section 298 of the Income-tax Act, 1961
- Income Tax Department: Income-tax Act, 2025 (Section 535)
- Income Tax Department: Income-tax Act, 2025 and transition resources
- CBDT press release: Commencement on 1 April 2026
This article is for general legal information. Statutory text, Gazette notifications and applicable transitional provisions govern individual cases.