Section 529 · Miscellaneous
Section 529 of the Income-tax Act, 2025 — Power to Withdraw Approval (Equivalent of Section 293C of the 1961 Act)
By CA Rajat Agrawal
Updated 05 Jul 2026
Chapter XXIII
📜 What the law says — Section 529, Income-tax Act 2025
529. Where the Central Government or the Board or an income-tax authority, has
the power to grant any approval under any provision of this Act to any assessee,
the Central Government or the Board or such income-tax authority may, withdraw
such approval at any time after recording the reasons therefor, even if such provision
does not specifically allow for its withdrawal, after giving such assessee a reasonable
opportunity of being heard.
Act to have effect pending legislative provision for charge of tax.
In plain language
What Section 529 actually says
Section 529 of the Income-tax Act, 2025 is a short but powerful enabling provision sitting in the miscellaneous chapter of the new Act. In plain words, it says this: wherever the Act gives the Central Government, the CBDT (Board) or an income-tax authority the power to grant an approval, that same authority also has the power to take that approval back — even if the specific section that granted the approval does not itself mention any power of withdrawal.
It is the direct successor to Section 293C of the Income-tax Act, 1961 (which was inserted by the Finance (No. 2) Act, 2009). The wording and effect are substantially the same; only the section number has changed as part of the 2025 Act's renumbering exercise. Section 529 takes effect from 1 April 2026 along with the rest of the new Act.
Why this section exists
The Income-tax Act contains dozens of provisions where an authority "approves" or "registers" something — a charitable trust, a pension or superannuation fund, a scientific research institution, a valuer, a specified deposit scheme, an infrastructure entity, and so on. Historically, some of these approval provisions did not expressly state that the approval could later be cancelled. This created legal uncertainty: could the department withdraw an approval it had wrongly or fraudulently granted, if the section was silent?
Section 529 removes that doubt once and for all. It supplies a general, standing power of withdrawal that attaches to every approval-granting provision in the Act. The logic is simple — the power to grant carries with it the power to revoke.
Who and what it applies to
- Who can act: only the same class of authority that had the power to grant the approval — the Central Government, the Board (CBDT), or the relevant income-tax authority (e.g., Principal Commissioner / Commissioner).
- What can be withdrawn: any approval, recognition or sanction granted under any provision of the Act — for example approvals of charitable/religious trusts and institutions, funds, research associations, or other notified entities.
- Who is affected: the person or entity holding the approval (the trust, fund, institution, valuer or assessee).
The two mandatory safeguards
The power is not arbitrary. Section 529 builds in two conditions of natural justice that must be satisfied before any withdrawal is valid:
- 1. Record reasons in writing. The authority must record the reasons for withdrawing the approval. A cryptic or unreasoned order is open to challenge.
- 2. Reasonable opportunity of being heard. The affected person must be given a reasonable opportunity to show cause against the proposed withdrawal — typically through a show-cause notice and a chance to reply or be heard.
If either safeguard is skipped, the withdrawal order can be quashed by an appellate authority or High Court as being in breach of the principles of natural justice.
How it interacts with other sections
Section 529 is a backstop / residuary power. Where a specific section already lays down its own detailed cancellation procedure — for instance, the machinery for cancelling registration of charitable trusts, or for withdrawing approval of a fund — that specific procedure governs. Section 529 chiefly fills the gaps: it authorises withdrawal in those cases where the enabling section is silent, so no approval is ever "irrevocable" merely because of a drafting omission.
Practical implications for taxpayers
- No approval is permanent. Trusts, funds and institutions should treat approvals as conditional and keep complying with the terms on which the approval was granted.
- Consequences of withdrawal can be serious — loss of exemption, denial of deduction to donors, or taxation of income that was previously exempt, sometimes from the date the approval is withdrawn.
- You have a right to be heard. If you receive a show-cause notice proposing withdrawal, respond fully and on time; do not ignore it.
- Withdrawal orders are appealable / can be challenged if reasons are not recorded or if you were not given a fair hearing.
💡 Example
Worked example 1 — Charitable trust. The Sunrise Education Trust obtained approval and was enjoying exemption on its ₹80,00,000 annual surplus. During a survey, the department finds the trust diverted ₹25,00,000 to a trustee's private company. Using the general withdrawal power under Section 529 (read with the specific trust provisions), the Commissioner issues a show-cause notice, records reasons, gives the trust a hearing, and then withdraws the approval. Result: the trust loses exemption, and the surplus that was earlier exempt becomes taxable — a fresh tax liability that could run into several lakhs, plus loss of 80G-type donor benefit.
Worked example 2 — Approved fund. A superannuation fund holding ₹5 crore is found to have invested contrary to the conditions of its approval. The authority records reasons, gives the trustees a reasonable opportunity of being heard, and withdraws approval effective from a specified date. From that date the fund loses its concessional tax treatment on income and on employer contributions.
A relatable story. Think of Section 529 like a school that issues a "verified" badge to a coaching centre. The rules that created the badge never said the school could take it back — but common sense says it can, if the centre later cheats. Section 529 is the written rule that confirms: "Yes, the same office that gave the badge can take it away — but only after telling you why in writing and letting you explain your side first." So the centre isn't ambushed; it gets a notice, a chance to reply, and a reasoned order.
| Aspect | Position under Section 529 of the Income-tax Act, 2025 |
|---|
| 1961 Act equivalent | Section 293C (inserted by the Finance (No. 2) Act, 2009) |
| Chapter | Miscellaneous provisions |
| Effective from | 1 April 2026 |
| Core power | Authority that can grant an approval can also withdraw it, even if the granting section is silent on withdrawal |
| Who may withdraw | Central Government / CBDT (Board) / income-tax authority — the same class that granted it |
| Condition 1 | Reasons for withdrawal must be recorded in writing |
| Condition 2 | Reasonable opportunity of being heard / showing cause must be given |
| Nature of power | General / residuary — specific cancellation procedures in other sections prevail where they exist |
| Typical approvals covered | Trusts & institutions, funds, research associations and other notified/approved entities |
| Remedy for affected party | Reply to show-cause notice; challenge order if reasons not recorded or hearing denied |
Related sections
Section 293C (1961 Act) — Power to withdraw approval (predecessor provision) Section 530 — Power to make exemption, etc., in relation to certain Union Territories (miscellaneous) Section 12AB (1961 Act) — Registration & cancellation of charitable trust registration Section 80G — Approval of institutions for donor deductions (approval that can be withdrawn) Section 35 — Approval of scientific research associations/institutions Fourth Schedule — Approval and withdrawal of approval of recognised/superannuation funds
Frequently asked questions
What is Section 529 of the Income-tax Act, 2025 in simple words?
It is a general power that lets the same authority which granted an approval (Central Government, CBDT or an income-tax authority) also withdraw that approval, even if the section that gave the approval does not mention withdrawal. It is the 2025 Act's version of Section 293C of the 1961 Act.
Which section of the old Income-tax Act, 1961 does Section 529 correspond to?
It corresponds to Section 293C of the Income-tax Act, 1961, which was introduced by the Finance (No. 2) Act, 2009. The substance is essentially the same; only the numbering has changed.
Can the department withdraw my trust's or fund's approval without warning?
No. Section 529 requires the authority to first record its reasons in writing and to give you a reasonable opportunity of being heard (usually via a show-cause notice) before withdrawing the approval.
What happens if the authority withdraws approval without recording reasons or giving a hearing?
Such a withdrawal breaches the principles of natural justice and can be challenged before the appellate authorities or the High Court and set aside. The two safeguards are mandatory, not optional.
Does Section 529 override the specific cancellation rules for charitable trusts or funds?
No. Where a specific section already provides its own detailed cancellation procedure, that specific procedure applies. Section 529 mainly fills gaps where the granting provision is silent about withdrawal.
From what date does a withdrawal of approval take effect?
The withdrawal order specifies the effective date. Depending on the facts and the specific provision involved, the loss of exemption or benefit can apply from that date, so the consequences should be read carefully in the order itself.
When does Section 529 come into force?
It comes into force on 1 April 2026, along with the rest of the Income-tax Act, 2025 (as amended by the Finance Act, 2026).
C
CA Rajat Agrawal
Chartered Accountant, EaseValue · Reviewed 05 Jul 2026
This explainer is prepared and reviewed by EaseValue's tax team, based on the text of the Income-tax Act, 2025 (as amended by the Finance Act, 2026).
Disclaimer: This page explains the law in general terms for education and is not professional advice. The Income-tax Act, 2025 takes effect from 1 April 2026; provisions, thresholds and interpretations may change. Please confirm your specific position with our team before acting.
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