Income Tax Act 2025: Section 264 for Tax Year 2026-27

Scheme for submission of returns through tax return preparers

[Section-264 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]

Section 264(1) of Income Tax Act 2025

264(1) The Board may make a Scheme for furnishing returns of income through a tax return preparer and such Scheme shall be notified, which—

• (a) may enable any specified class or classes of persons in preparing and furnishing returns of income through a tax return preparer authorised to act as such under the Scheme;
• (b) may be made irrespective of provisions of section 263.

Section 264(2) of Income Tax Act 2025

264(2) In this section,—

• (a) “tax return preparer” means any individual, not being a person referred to in section 515(3)(a)(ii) or an employee of the “specified class or classes of persons”, who has been authorised to act as a tax return preparer under the Scheme made under this section;
• (b) “specified class or classes of persons” means any person, other than a company or a person, whose accounts are required to be audited under section 63 or under any other law, who is required to furnish a return of income under this Act.

Section 264(3) of Income Tax Act 2025

264(3) Every notification for the Scheme referred to in sub-section (1) shall be issued as per section 534 of this Act.

FAQs on Section 264 of Income Tax Act 2025

What is the purpose of Section 264 of the Income Tax Act, 2025?
Section 264 empowers the Board to create a Scheme for furnishing returns of income through tax return preparers for specified classes of persons.

From when is Section 264 applicable?
Section 264 is applicable with effect from 1st April, 2026.

Who can use the services of a tax return preparer under the Scheme?
The Scheme may allow any specified class or classes of persons, excluding companies and persons whose accounts are required to be audited under section 63 or any other law.

Who is a tax return preparer under this Scheme?
A tax return preparer is an individual who is not an employee of the assessee or covered under section 515(3)(a)(ii) and is authorised under the Scheme to assist in preparing and submitting returns.

Can a company avail the facility of tax return preparers under this Scheme?
No, companies are excluded from the definition of “specified class or classes of persons” and hence cannot avail this Scheme.

Are tax return preparers government employees or professionals?
Tax return preparers are authorised individuals, not government employees or employees of the taxpayers, and must be qualified under the Scheme provisions.

Does Section 264 override other provisions of the Act?
Yes, the Scheme may be made irrespective of the provisions of section 263.

Who notifies the Scheme under Section 264?
The Central Board of Direct Taxes (the Board) will notify the Scheme.

Under which provision is the Scheme notification to be issued?
The Scheme is to be notified in accordance with the procedure laid out in section 534 of the Act.

What kind of persons are excluded from the “specified class or classes of persons”?
Persons required to get their accounts audited under section 63 or under any other law and companies are excluded.

Can salaried individuals use the tax return preparer Scheme?
Yes, salaried individuals who do not fall under the excluded categories can avail the Scheme.

Can partnership firms use tax return preparers under this Scheme?
Partnership firms not requiring audit under section 63 or any other law can be part of the specified class and hence may use the Scheme.

Is the use of a tax return preparer mandatory for specified persons?
No, the Scheme enables but does not mandate the use of a tax return preparer.

Will the Scheme include training or certification for tax return preparers?
The details will be specified in the notification of the Scheme as per section 534.

Can a Chartered Accountant act as a tax return preparer under this Scheme?
Not if they are covered under section 515(3)(a)(ii), as such persons are explicitly excluded.

Will the return prepared by a tax return preparer be treated the same as a self-filed return?
Yes, once furnished through the authorised tax return preparer under the Scheme, it will be treated as a valid return.

Will the Scheme apply across all regions of India?
Yes, the Scheme will be applicable pan-India as notified by the Board.

Can the Scheme be modified after its notification?
Yes, the Board may amend or revise the Scheme through subsequent notifications as per section 534.

Are there any penalties for tax return preparers under this Scheme for incorrect filing?
Penalties, conditions, and duties of tax return preparers will be detailed in the Scheme notified under section 534.