Section 288A and 288B of Income Tax Act 1961: Rounding Off Income, Tax Payable and Refund

Sections 288A and 288B of the Income Tax Act, 1961 prescribe a uniform method for rounding monetary figures to the nearest multiple of ten rupees. Section 288A applies to total income, while Section 288B applies to amounts payable and refunds due under the Act.

In brief: Ignore paise first. If the remaining rupee amount is not a multiple of ten, a last digit of 5 or more is rounded upward to the next multiple of Rs. 10, while a last digit below 5 is rounded downward to the preceding multiple of Rs. 10.

Section 288A - Rounding Off of Income

Meaning: Section 288A governs the final rounding of the assessee's total income after it has been computed in accordance with the preceding provisions of the Income Tax Act, 1961.

Section 288A: The amount of total income computed under the Act is rounded to the nearest multiple of ten rupees. Paise are ignored first. Where the resulting amount is not already a multiple of ten, a last digit of five or more is increased to the next higher multiple of ten and a last digit below five is reduced to the next lower multiple of ten. The rounded amount is treated as the assessee's total income for the purposes of the Act.

How Section 288A works

Compute total income under the applicable provisions of the Income Tax Act.
Ignore any paise in the computed figure.
If the rupee figure already ends in zero, no further rounding is required.
If the last digit is 5, 6, 7, 8 or 9, round upward to the next multiple of Rs. 10.
If the last digit is 1, 2, 3 or 4, round downward to the preceding multiple of Rs. 10.

Example: Total income of Rs. 5,42,675.80 is first taken as Rs. 5,42,675 after ignoring paise and is then rounded to Rs. 5,42,680. Total income of Rs. 5,42,674.80 is first taken as Rs. 5,42,674 and is then rounded to Rs. 5,42,670.

Section 288B - Rounding Off Amount Payable and Refund Due

Meaning: Section 288B applies to any amount payable under the Income Tax Act and to any refund due under the Act. It requires the final payable or refundable amount to be rounded to the nearest multiple of ten rupees.

Section 288B: Any amount payable and any amount of refund due under the Act is rounded to the nearest multiple of ten rupees. Paise are ignored first. If the remaining amount is not a multiple of ten, a last digit of five or more is increased to the next higher multiple of ten and a last digit below five is reduced to the next lower multiple of ten.

Difference between Section 288A and Section 288B

Section 288A operates on total income, whereas Section 288B operates on the amount payable or refund due. Both provisions use the same nearest-Rs.-10 rounding method, but they apply at different stages of tax computation.

Examples under Section 288B

An amount payable of Rs. 12,345.90 is taken as Rs. 12,345 after ignoring paise and rounded to Rs. 12,350.
An amount payable of Rs. 12,344.90 is taken as Rs. 12,344 and rounded to Rs. 12,340.
A refund due of Rs. 8,765.25 is taken as Rs. 8,765 and rounded to Rs. 8,770.

Legal Context and Applicability

Sections 288A and 288B form part of Chapter XXIII of the Income Tax Act, 1961. The Income Tax Act, 1961 continues to govern tax periods to which that Act applies. For tax periods governed by the newer income-tax legislation, the applicable provisions of that legislation should be consulted.

Evidence law note: These provisions concern income-tax computation and do not depend upon the Indian Evidence Act, 1872 or the Bharatiya Sakshya Adhiniyam, 2023. The article therefore states the tax-law position applicable to Sections 288A and 288B without importing later evidence-law provisions.

Official References

For the statutory text and current tax administration material, readers may refer to the official India Code portal and the Income Tax Department e-Filing Portal.

This page is intended as a legal information resource. Statutory amendments, transitional provisions and the law applicable to the relevant tax year should be checked before acting on the information.