The section creates the entitlement to a refund. If a person satisfies the Assessing Officer that the amount of tax paid by him or on his behalf, or treated as paid by him or on his behalf, for any tax year exceeds the amount with which he is properly chargeable under the Act for that year, he is entitled to a refund of the excess.
Why it is there
Tax is collected during the year by deduction, collection and advance payment before the correct liability is known, so an excess is a normal outcome rather than an error. The section gives that excess back as a matter of entitlement, measured against the amount with which the person is properly chargeable.
Who it applies to
Any person whose tax paid, or treated as paid, for a tax year exceeds the amount with which he is properly chargeable
A person on whose behalf tax has been paid, including by deduction or collection treated as payment by him
The Assessing Officer, whom the person must satisfy
What this means in practice
The comparison is not between what was paid and what was demanded, but between what was paid or treated as paid and the amount with which the person "is properly chargeable under this Act for that year". Tax treated as paid on the person's behalf counts equally with tax he paid himself, which is what brings deduction and collection at source into the computation. The onus is on the person: he must satisfy the Assessing Officer, and the entitlement is confined to the excess.
An example
Illustrative only, and invented for this page. The figures are chosen to show the rule biting, not taken from any real matter.
An individual has tax of nine lakh rupees deducted at source and pays advance tax of two lakh rupees for a tax year, and her correct liability for that year works out to eight lakh rupees. Eleven lakh has been paid or is treated as paid on her behalf, so she is entitled under this section to a refund of the three lakh rupee excess over the amount with which she is properly chargeable.
Where you meet this section
You meet this as the refund figure in the intimation or assessment order for a tax year, and it is the provision an assessee relies on when claiming a refund of excess tax deducted, collected or paid in advance. Where the claim is disputed, it is the Assessing Officer who must be satisfied.
The words themselves
If any person satisfies the Assessing Officer that the amount of tax paid by him or on his behalf or treated as paid by him or on his behalf for any tax year exceeds the amount with which he is properly chargeable under this Act for that year, he shall be entitled to a refund of the excess.
Section 431, Income-tax Act, 2025.
What people get wrong
Comparing the tax paid with the tax demanded. The section measures the excess against the amount with which the person is properly chargeable under the Act for that year.
Counting only tax the person paid himself. The section includes tax paid on his behalf and tax treated as paid by him or on his behalf.
Assuming the refund follows automatically. The person must satisfy the Assessing Officer that the excess exists.
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.
A circular binds the department, not you and not a court. Every one below was written under the 1961 Act; it reaches this section because the department’s own concordance carries the provision it names to this one.
Circular No. 670 — Instructions to subordinate authorities - Authorisation regarding condonation of delay in filing refund claim 1993-10-26
Circular No. 521 — Instructions to subordinate authorities - Authorisation regarding condonation of delay in filing refund claim 1988-08-17
Circular No. 503 — Instructions to subordinate authorities - Authorisation regarding condonation of delay in filing refund claim 1988-02-06
Circular No. 379 — Instructions to subordinate authorities - Authorisation regarding condonation of delay in filing refund claim 1984-04-10
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 431. 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.
Incredible Unique Buildcon P Ltd v ITOHigh CourtHelps taxpayertagged s.237 My customer deducted TDS on my bills and deposited almost none of it, and I have no Form 16A. Can I still get the credit and stop the demand?
Sanjay Sudan v ACITHigh CourtHelps taxpayertagged s.237 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?
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.
