Section 381 of the Income-tax Act, 2025

Section 381 — Board for Advance Rulings. Successor to s.245 of the 1961 Act.

Where this section sits

Section 381 is in Chapter XVIII — Appeals Revisions and Alternate Dispute Resolutions, which runs from section 356 to section 389.

← Section 380 · Section 382 →

What this section does

Sub-section (1) requires the Central Government to constitute one or more Boards for Advance Rulings, as may be necessary, for giving advance rulings under this Chapter, on or after such date as the Central Government may appoint by notification. Sub-section (2) fixes the composition: each Board consists of two members, each being an officer not below the rank of Chief Commissioner, nominated by the Board.

Why it is there

An advance ruling mechanism needs a body to give the rulings and a rule about who may sit on it, and this section supplies both. Setting the floor at Chief Commissioner rank and requiring two members means a ruling is never the view of a single officer or of a junior one. Making the start date turn on a notification lets the Central Government bring the machinery into operation when it is ready rather than on the Act's own commencement.

Who it applies to

The Central Government, which constitutes the Boards and appoints the date by notification
The Central Board of Direct Taxes, which nominates the members
An officer not below the rank of Chief Commissioner nominated as a member
An applicant seeking an advance ruling under this Chapter

The figures, and what each one turns on

Read the condition in the same row. A figure quoted without it is a wrong answer with a citation attached.

What	Figure	The condition on it	Where
Composition of each Board for Advance Rulings	Two members	Each an officer not below the rank of Chief Commissioner, nominated by the Board	Sub-section (2)

What this means in practice

The Board is constituted from serving income-tax officers rather than from judicial members, and the only qualification the section states is rank — not below Chief Commissioner. Its existence is not automatic: sub-section (1) makes the Boards operative only on or after a date the Central Government appoints by notification, and only as many as may be necessary, so the availability of the advance ruling route depends on that notification rather than on the section alone. Nothing here says what a Board may rule on or how it works; the section is confined to constitution and composition.

Where you meet this section

An applicant does not deal with this section directly. It is the provision under which the Board that hears his advance ruling application exists, and it is cited where an objection is taken to the constitution of the Board or to the rank of a member who signed the ruling.

The words themselves

The Board for Advance Rulings shall consist of two members, each being an officer not below the rank of Chief Commissioner, as may be nominated by the Board.

Section 381(2), Income-tax Act, 2025.

What people get wrong

Expecting a judicial or independent member. Sub-section (2) provides for two members, each an officer not below the rank of Chief Commissioner nominated by the Board.
Assuming the Boards exist from the commencement of the Act. Sub-section (1) makes them operative on or after a date the Central Government appoints by notification.
Reading the section as conferring the power to give rulings. It constitutes the body; the ruling power and procedure come from the rest of the Chapter.

What this replaced

The correspondence is the Income Tax Department’s own, from its comparison utility for the 1961 and 2025 Acts. A renumbering is the easy half; whether the words changed is the half that decides cases.

245-OB - Board for Advance Rulings

See the full 1961 to 2025 concordance.

Notifications that reach this section

A notification is made under a power the Act gives and, within that power, is law. These too were made under the 1961 Act and are placed here by the department’s concordance.

Notification No. 97/2021 [F.No. 370142/31/2021-TPL (Part II)] / SO 3562(E) — 2 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(ii)] 2021-09-01
Notification No. 96/2021 [F.No. 370142/31/2021-TPL (Part II)] / SO 3561(E) — 2 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(ii)] 2021-09-01

See the notifications index.

Case law carried across

Read this before you rely on it. Every decision below was decided under the Income-tax Act, 1961. It appears here because it is tagged to a 1961 provision that the department’s own mapping carries to section 381. That is an inference we have drawn, not a holding on the new section: where the words changed in the move, the reasoning may not survive. Treat this as the place to start looking, not as authority on the 2025 Act.

Vodafone Idea Ltd v ACIT Supreme CourtHelps departmenttagged s.245
My refund is being held back because scrutiny is pending. Can the officer simply sit on it?
Bharat Petroleum Corporation Ltd v ADIT High CourtHelps taxpayertagged s.245
Does a stay granted under s.220(6) lapse after six months, freeing the department to adjust your refund?
Court On Its Own Motion v CIT High CourtHelps taxpayertagged s.245
CPC has refused my TDS credit and adjusted the refund against an old demand. What did the Delhi High Court actually direct?
Huawei Telecommunications India P Ltd v ACIT High CourtHelps taxpayertagged s.245
There is interim protection against recovery for that year. Can the department still adjust my refund?
Jet Privilege Pvt Ltd v DCIT High CourtHelps taxpayertagged s.245
Your refund was adjusted against an old demand. Did they have to tell you first?
Nishith M. Desai v CIT High CourtHelps taxpayertagged s.245
You can afford to pay. Does that mean the stay must be refused?
Rajendra Kumar v ACIT High CourtHelps taxpayertagged s.245
The CPC has adjusted my entire refund against a demand that is under appeal. Do I have to file a separate stay application before I can complain?
Sanjay Sudan v ACIT High CourtHelps taxpayertagged s.245
My employer deducted TDS but never deposited it. The department has raised a demand on me and set my later refund off against it. Can it do that?
Tata Communications Ltd v Dy CIT High CourtHelps taxpayertagged s.245
My refund was adjusted against an old demand and I was never told first. Is that adjustment valid?
Tata Communications Ltd v Union of India High CourtHelps taxpayertagged s.245
Your refund was adjusted against demands that were already stayed. Is that lawful?
CBDT Instruction No. 12/2013 on adjustment of refunds CBDTHelps taxpayertagged s.245
Is there a departmental instruction I can quote when CPC adjusts my refund without notice?
CBDT Office Memoranda of 1 June 2015 and 11 March 2016 — TDS credit mismatch CBDTHelps taxpayertagged s.245
Is there anything binding on the assessing officer that stops him enforcing a demand caused by my deductor's failure to deposit?

Explainers

Advance rulings and the Board tagged s.245-OB
Can I get the tax position on a transaction decided in advance, and will the department be bound by it?
Set-off and withholding of refunds tagged s.245
The department has adjusted my refund against an old demand without telling me. Is that allowed?
Tax was deducted from your money: s.205 stops the department coming after you for it tagged s.245
The person who paid me deducted TDS and never deposited it. The department has raised a demand on me. Can it do that?
There is no appeal against a s.245 adjustment — and what to do instead tagged s.245
The department has set off my refund against a demand under s.245. Can I appeal that, or do I have to file a writ?

What this page does not tell you. It does not reproduce the section. Everything above was written from the section’s own text as the Income Tax Department publishes it — the text is here, and nothing here is advice on your facts. Where a figure matters, read the sub-section it comes from.