Section 535 of the Income-tax Act, 2025 — Power to Remove Difficulties (Removal of Difficulties Orders)

In plain language

What Section 535 actually says

Section 535 is a "removal of difficulties" provision. It gives the Central Government (the Ministry of Finance, acting through the Government of India) the power to iron out practical problems that come up while putting the brand-new Income-tax Act, 2025 into operation from 1 April 2026. In plain words: if some rule in the new Act creates a genuine roadblock in real life, the Government can issue an order to fix it — but only in a way that is not inconsistent with the Act itself.

The section has four sub-sections:

• Sub-section (1) — the core power: If any difficulty arises in giving effect to the Act, the Central Government may, by general or special order, do anything not inconsistent with the Act which appears necessary or expedient to remove the difficulty.
• Sub-section (2) — transitional bridge to the 1961 Act: Such an order may provide for the adaptations or modifications subject to which the old Income-tax Act, 1961 shall continue to apply to assessments for the tax year ending 31 March 2026 or any earlier year.
• Sub-section (3) — a hard sunset: No order can be made after the expiry of three years from 1 April 2026 — i.e. the power lapses on 1 April 2029.
• Sub-section (4) — Parliamentary oversight: Every order made must be laid before each House of Parliament as soon as possible after it is made.

Why this section exists

The Income-tax Act, 2025 replaces the six-decade-old Income-tax Act, 1961. A change this large — new section numbers, reorganised chapters, redrafted language — inevitably throws up gaps, overlaps and edge-cases that no drafter can fully anticipate. Section 535 is a safety valve: instead of waiting months for Parliament to pass a corrective amendment, the Government can quickly issue a "Removal of Difficulties Order" (often abbreviated as an RoD Order) to keep the system running smoothly during the switchover.

Who does it apply to?

• Directly, it applies to the Central Government — it is the only authority that can exercise this power. Ordinary taxpayers, CAs and tax officers cannot invoke it.
• Indirectly, it affects everyone — because any RoD Order issued under it will change how a rule is read or applied for assessees, deductors, companies, trusts and professionals during the transition.

Key limits and conditions (the guardrails)

• Consistency test: The order cannot contradict or override the Act. It can only smooth implementation, not rewrite policy or create new tax liabilities.
• Time limit: Three years only — the door closes on 1 April 2029. This prevents the executive from using the power as a permanent parallel law-making route.
• Parliamentary laying: Every order goes before both Houses, so MPs can scrutinise and, if needed, question executive action.
• Transitional scope: Sub-section (2) is specifically about keeping the 1961 Act functional for old years (AY 2025-26 and earlier), so pending assessments, appeals and refunds are not left in limbo.

How it interacts with related sections

Section 535 is the direct successor to Section 298 of the Income-tax Act, 1961, which itself was used to manage the transition from the 1922 Act. The 2025 version is tighter — the old Section 298 did not always carry an explicit sunset, whereas Section 535 hard-codes the three-year cap. It works hand-in-hand with the repeal and savings provision (Section 536), which formally repeals the 1961 Act while saving actions already taken under it. It also sits alongside the general rule-making power (which lets the CBDT frame Rules) and the delegated power to issue notifications — but Section 535 is narrower and purpose-built for transition-era difficulties.

Practical implications for a normal taxpayer

• You will not "use" this section yourself, but you may see its output as CBDT/Ministry press releases or gazette notifications titled "Removal of Difficulties Order, 202X".
• If an ambiguity appears — say, how a deduction migrates from an old section number to a new one, or how a pending appeal is handled — an RoD Order can clarify it quickly, which reduces litigation.
• Because orders are laid before Parliament, they are public and can be relied upon; they are not secret administrative memos.