Advanced Direct Tax Laws and Practice · Income Tax Implication on Specified Transactions

Rules Under Section 533 and Delegated Legislation

Updated 11 October 2026 · Fact-checked

Section 533 of the Income-tax Act, 2025 lets the Board, subject to the control of the Central Government, make rules by notification to carry out the Act's purposes. Section 533(2) lists specific matters. Section 534 requires the rules to be laid before Parliament for thirty days, and Parliament can modify or annul them.

Understand Rules Under Section 533 and Delegated Legislation

Parliament cannot write every procedural detail into an Act. So it passes the main law and authorises the executive to fill in details. This is delegated legislation. Rules made under the Act are the main example.

Section 533(1) gives the power. The Board may, subject to the control of the Central Government, make rules by notification for carrying out the purposes of the Act. Section 533(2) then says that, without prejudice to the generality of this power, rules may provide for the listed matters. The list is illustrative. Clause (zb) also covers any other matter which the Act says is to be, or may be, prescribed.

The listed matters are mostly procedural or technical. Examples: the manner of arriving at income for non-residents and for income partly from agriculture and partly from business; the valuation of perquisites; depreciation percentages on written down value; the time and form for applying for a PAN; the class of persons who must file returns electronically; the form of audit reports; the procedure for double tax relief; the form and manner of appeals and the fee; the procedure for refunds; and the calculation of interest.

Section 533(3) deals with income that cannot be definitely ascertained, or only with unreasonable trouble and expense, in the cases under section 533(2)(b). The rules may prescribe methods of estimating that income. For income partly from agriculture and partly from business, they may specify the proportion deemed to be income liable to tax. An assessment based on such an estimate or proportion is deemed to be duly made as per the Act.

Section 533(4) allows retrospective effect, but not from a date earlier than the commencement of the Act. Unless the contrary is permitted, expressly or by necessary implication, no retrospective effect can prejudicially affect assessees. Section 534 is the check: rules must be laid before each House of Parliament. Difference to remember: the Act is passed by Parliament and sets the charge and principles. Rules are made by the executive and set procedure, forms and methods within the Act.

Key rules to remember

General rule-making power: Board + subject to control of Central Government + by notification → rules for carrying out the purposes of the Act (s. 533(1)); Section 533(2) listing is without prejudice to this general power.
Estimation of income: Where income cannot be definitely ascertained, or only with unreasonable trouble and expense → rules may prescribe estimation methods or a deemed proportion (s. 533(3)); Applies to the cases in s. 533(2)(b). Proportion rule is for income partly from agriculture and partly from business. Assessment on such basis is deemed duly made.
Retrospective rules: Retrospective effect allowed from a date not earlier than commencement of the Act; no prejudicial retrospective effect on assessees unless permitted expressly or by necessary implication (s. 533(4)); Do not say rules can go back to any date.
Laying before Parliament: Rules laid before each House while in session for a total of thirty days, in one session or two or more successive sessions (s. 534); If both Houses agree to modify or that the rule should not be made, it has effect only in modified form or no effect, without prejudice to things previously done.
Other delegated powers in the text: Notification to relax or lower TDS or TCS (s. 400(1)); Board guidelines to remove difficulty with Central Government approval, binding on authorities and deductors, laid before Parliament (s. 400(2)); faceless schemes (ss. 245, 260); Section 400(2) was substituted w.e.f. 1-4-2026 to make the guidelines binding. Notifications under ss. 245 and 260 must be laid before Parliament as soon as may be.

How to solve Rules Under Section 533 and Delegated Legislation questions

Use this method for any question on rule-making power and delegated legislation.

1Identify the issue: is it about who makes the rule, what it can cover, its effect in time, or parliamentary control?
2State the provision: section 533(1) for the power, 533(2) for the listed matter, 533(3) for estimation, 533(4) for retrospectivity, 534 for laying.
3Match the facts to a clause of section 533(2), for example perquisite valuation is clause (c) and refund procedure is clause (t). If none fits, check clause (zb).
4Check conditions: is the Board acting by notification and subject to Central Government control? Is the rule prejudicial and retrospective?
5Check parliamentary control: has the rule been laid for thirty days, and could both Houses modify or annul it?
6Conclude clearly: valid, valid in modified form, or no effect. Add that earlier acts stay protected.
7Add a practical point: the Act sets the charge, the rules set the procedure and forms, so you must comply with both.

Quickest way: Four-word recall: Who, What, When, Check

When to use it: Use it for short notes or when time is tight.

Who: Board, subject to Central Government control, by notification (s. 533(1)).
What: matters in s. 533(2), plus any matter the Act says is prescribed.
When: effect from commencement date at the earliest; no prejudicial retrospectivity (s. 533(4)).
Check: laid before both Houses for thirty days; modified or annulled if both agree (s. 534).

Common mistakes in Rules Under Section 533 and Delegated Legislation

Saying Parliament makes the income-tax rules.
Students confuse the Act with the rules.
Fix: Write that the Board makes rules subject to Central Government control; Parliament only has a laying and modification check.
Treating the list in section 533(2) as exhaustive.
The long list looks complete.
Fix: Quote the words 'without prejudice to the generality of the foregoing power' and clause (zb).
Saying rules can be retrospective from any date.
Students remember only that retrospective effect is allowed.
Fix: State the limit: not earlier than commencement of the Act, and no prejudicial effect on assessees unless permitted expressly or by necessary implication.
Saying a rule annulled by Parliament voids all past actions.
Students ignore the saving words in section 534.
Fix: Add that modification or annulment is without prejudice to the validity of anything previously done under the rule.
Mixing section 533 rules with section 400 guidelines.
Both are executive instruments in the same topic.
Fix: Rules under s. 533 carry out the Act's purposes. Section 400(2) guidelines remove difficulty in the TDS and TCS Chapter, need Central Government approval, and bind authorities and deductors.

Worked examples

Example 1

The Board notifies a rule prescribing the manner of valuing a perquisite and, separately, the procedure for refund applications. A taxpayer says only Parliament can prescribe these. Advise.

Show the solution

Provision: section 533(1) empowers the Board, subject to Central Government control, to make rules by notification for carrying out the Act's purposes.
Analysis: section 533(2)(c) covers valuing perquisites in a manner that appears to the Board proper and reasonable. Section 533(2)(t) covers the procedure on refund applications.
Both matters fall within the listed heads, so the delegation is express.
Parliamentary control: the rules must be laid before each House for thirty days under section 534, and both Houses may modify or annul them.
Conclusion: unless Parliament has modified or annulled them, the rules are valid and the taxpayer must follow them.

Answer: The taxpayer is wrong. The Board may prescribe both matters by rules under section 533(2)(c) and (t), subject to Central Government control and the laying requirement in section 534.

Example 2

A rule notified under the Act is given effect from a date before the Act commenced and increases a procedural burden on assessees. Is it valid? What if Parliament later modifies it?

Show the solution

Provision: section 533(4) allows retrospective effect only from a date not earlier than the commencement of the Act.
Analysis: this rule goes back before commencement, so it exceeds the permitted limit.
Further, unless expressly or by necessary implication permitted, no retrospective effect can prejudicially affect assessees. A heavier burden is prejudicial.
On Parliament: under section 534, if both Houses agree to modify the rule, it has effect only in modified form, without prejudice to anything previously done under it.
Conclusion: the retrospective part is not supported by section 533(4).

Answer: The rule cannot validly operate from a date before commencement of the Act, and it also faces the bar on prejudicial retrospectivity. Any later parliamentary modification applies prospectively from that point without undoing earlier valid actions.

Exam tips

Quote section numbers: 533(1) for the power, 533(2) for matters, 533(3) for estimation, 533(4) for retrospectivity, 534 for laying.
In case studies, match the facts to a specific clause of section 533(2) before concluding.
Show the Act-versus-rules distinction in one line; it is a favourite short-note point.
Mention the wording 'subject to the control of the Central Government' and 'by notification'; examiners look for these.
Link to section 400(2), 245 and 260 when asked about delegated legislation more broadly.

Practice questions from Income Tax Implication on Specified Transactions

Rules Under Section 533 and Delegated Legislation in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Rules Under Section 533 and Delegated Legislation: frequently asked questions

Who makes rules under the Income-tax Act, 2025?

The Board makes them, subject to the control of the Central Government, by notification. The power is in section 533(1). The Act and rules together form the compliance framework.

What is the difference between the Act and the rules?

The Act is passed by Parliament and contains the charge and main provisions. Rules are made by the executive under section 533 and cover details such as forms, procedures and methods of computation. Rules must stay within the Act.

Must rules be laid before Parliament?

Yes. Section 534 requires every rule to be laid before each House while in session for a total of thirty days. If both Houses agree to modify it or that it should not be made, it takes effect only in modified form or not at all.

Can income-tax rules operate retrospectively?

Only from a date not earlier than the commencement of the Act. Under section 533(4), no retrospective effect can prejudicially affect assessees unless permitted expressly or by necessary implication.