Section 290 protects persons who deduct, retain or pay tax on another person's income in pursuance of the Act. Every such person is indemnified for the deduction, retention or payment.
It applies to deductors, payers and others who act under the Act in respect of income belonging to someone else, such as persons deducting tax at source.
Operative consequences
A person who deducts or retains tax in pursuance of the Act is protected against a claim by the person whose income it is for the amount so deducted or retained.
The protection extends to the payment of the tax to the Government.
The indemnity is limited to action "in pursuance of this Act"; a deduction or retention not made under the Act is outside the section.
Status
Section 290 is operative for assessment year 2026-27. It is not time-limited. The Finance Act, 2026 did not amend this section.
The 1961 Act governs assessment year 2026-27 and earlier; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject the 2025 Act provision is s. 518.
Function in the statutory architecture
Section 290 protects persons who deduct, retain or pay tax on another person's income in pursuance of the Act. Every such person is indemnified for the deduction, retention or payment.
It applies to deductors, payers and others who act under the Act in respect of income belonging to someone else, such as persons deducting tax at source.
Operative consequences
Status
Section 290 is operative for assessment year 2026-27. It is not time-limited. The Finance Act, 2026 did not amend this section.
The 1961 Act governs assessment year 2026-27 and earlier; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject the 2025 Act provision is s. 518.