Section 295 is the general rule-making power. The Board may, subject to the control of the Central Government, by notification in the Gazette of India, make rules for the whole or any part of India for carrying out the purposes of the Act. Notifications amending the Income-tax Rules, 1962 are issued in exercise of this power.
Sub-section (2) lists matters on which rules may be made, without limiting the general power: among them the determination of classes of income, the computation of income in particular cases, valuation of perquisites, depreciation rates, the form and manner of applications, returns, appeals and verification, the procedure for refunds and interest, the authority to be prescribed, and any other matter which the Act says is to be or may be prescribed. Where income under clause (b) cannot be definitely ascertained, or only with unreasonable trouble and expense, the rules may prescribe methods of estimate and, for income partly agricultural and partly business, the proportion deemed liable to tax.
Operative consequences
An assessment based on such an estimate or proportion is deemed to be duly made in accordance with the Act.
Rules may be given retrospective effect from a date not earlier than the commencement of the Act.
Unless the contrary is permitted, expressly or by necessary implication, no retrospective effect may be given to a rule so as to prejudicially affect the interests of assessees.
Every rule must be laid before Parliament under s. 296.
Status
Section 295 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. 533, under which the Income-tax Rules, 2026 are made.
Function in the statutory architecture
Section 295 is the general rule-making power. The Board may, subject to the control of the Central Government, by notification in the Gazette of India, make rules for the whole or any part of India for carrying out the purposes of the Act. Notifications amending the Income-tax Rules, 1962 are issued in exercise of this power.
Sub-section (2) lists matters on which rules may be made, without limiting the general power: among them the determination of classes of income, the computation of income in particular cases, valuation of perquisites, depreciation rates, the form and manner of applications, returns, appeals and verification, the procedure for refunds and interest, the authority to be prescribed, and any other matter which the Act says is to be or may be prescribed. Where income under clause (b) cannot be definitely ascertained, or only with unreasonable trouble and expense, the rules may prescribe methods of estimate and, for income partly agricultural and partly business, the proportion deemed liable to tax.
Operative consequences
Status
Section 295 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. 533, under which the Income-tax Rules, 2026 are made.