Section 264 of the Income-tax Act, 2025 — Scheme for Submission of Returns Through Tax Return Preparers (TRP)

In plain language

What Section 264 actually says

Section 264 of the Income-tax Act, 2025 (effective 1 April 2026) empowers the Central Board of Direct Taxes (CBDT, referred to as "the Board") to frame and notify a Scheme for the submission of returns of income through Tax Return Preparers (TRPs). In plain words, it lets ordinary taxpayers get their income-tax return prepared and filed by a trained, government-authorised helper — the TRP — instead of doing it entirely on their own or paying a full-fledged professional.

This is the 2025 Act's re-enactment of the old Section 139B of the Income-tax Act, 1961, under which the "Tax Return Preparer Scheme, 2006" (the well-known TRP Scheme run through trpscheme.com) operates. The substance is carried forward almost unchanged; only the section number and cross-references are new.

Who it applies to (the "specified class")

• Eligible taxpayers: Any person other than a company, and other than a person whose accounts are required to be audited under Section 63 (tax audit) of the 2025 Act or under any other law. In practice this means individuals and Hindu Undivided Families (HUFs) with simple, non-audit affairs — salaried employees, small pensioners, and small business/professional taxpayers below the audit threshold.
• Excluded: Companies, and any taxpayer whose books must be audited, cannot file through the TRP route. Their returns need a Chartered Accountant / professional preparation.

Who can be a Tax Return Preparer

A TRP is defined as an individual authorised under the Scheme who is not:

• an employee of the taxpayer (the specified class of persons); or
• a person referred to in Section 515(3)(a)(ii) — broadly, the categories of professionals (such as Chartered Accountants, legal practitioners and specified officers) who are otherwise authorised to act on the taxpayer's behalf and are therefore kept outside the TRP pool.

Under the operating scheme, TRPs are typically graduates trained and certified by the Income-tax Department. CAs, advocates and officers of banks where the assessee holds an account cannot be TRPs — the scheme is designed to create a separate, lower-cost cadre of preparers.

What the Scheme can provide for

Because Section 264 is an enabling provision, the actual rules live in the notified Scheme (issued as per Section 534 of the 2025 Act — the general power to make schemes/notifications). A Scheme framed under Section 264 may specify:

• the educational and other qualifications, training and conditions a person must satisfy to act as a TRP;
• the code of conduct, duties and obligations of TRPs;
• the circumstances in which authorisation may be withdrawn; and
• the manner in which TRPs are compensated / incentivised and the fees they may charge.

How it interacts with other provisions

• Overrides Section 263: Section 264 applies "irrespective of the provisions of Section 263" (the general return-filing machinery). So a return filed through a TRP is valid even though it is prepared by a third party.
• Section 63 (audit): defines the audit exclusion — audited taxpayers are outside the scheme.
• Section 534: the vehicle through which the Board actually notifies the Scheme.

Practical implications for a normal taxpayer

• You get affordable, doorstep help to file a correct return, useful for first-time filers, salaried people and small taxpayers.
• Under the operating scheme, the TRP's fee is largely borne by the Government as an incentive in the early years, so the taxpayer often pays little or nothing for a fresh return.
• You remain legally responsible for the contents of your return — the TRP assists, but the return is yours. Verification (e-verify/Aadhaar OTP) is still done by you.
• If your accounts need audit or you are a company, you cannot use a TRP and must file the normal way.