Chapter IV

Section 13 is the classifier provision for the entire computation framework. It enumerates the five Heads of Income under which all chargeable income must be classified for computation of total income. Each Head has its own dedicated…

Section 14 codifies the long-standing principle that EXPENDITURE incurred to earn EXEMPT income is NOT deductible against TAXABLE income. This is the substantive rule under-pinning the famous Rule 8D framework (1961 s. 14 A read with…

Section 15 is the charging section for the Salaries head. It charges salary on the EARLIER of (a) due basis OR (b) receipt basis, with the arrears clause preventing double-taxation. Two Explanations preserve the no-double-taxation rule…

Section 16 supplies the substantive 'salary' definition for Chapter IV Part B — what receipts fall within the Salaries head for purposes of charge under s. 15 . The 2025 Act adopts a more granular structure than 1961 s. 17(1) ,…

Section 17 defines 'perquisite' for purposes of the Salaries head -- the in-kind / fringe-benefit component of remuneration provided by employer to employee. The architecture has FOUR sub-sections: (1) inclusionary list of nine categories…

Section 18 catches receipts that resemble salary in substance but are not labelled as such — termination compensation, golden handshake, retrenchment compensation, ex-gratia, keyman-insurance receipts, sign-on bonus from prospective…

Section 19 is a TABLE-based provision listing 14 categories of allowed deductions / exemptions from salary income. Structured as: sub-section (1) operative provision read with the 14-row Table; sub-section (2) explanatory provisions for…

Section 20 is the charging section for the House Property head. It charges to tax the 'annual value' of property consisting of buildings or lands appurtenant thereto, owned (legally OR deemed) by the assessee, and not used for the…

Section 21 prescribes the methodology for determining 'annual value' under the HP head — the chargeable measure under s. 20 . Three operative formulas: (a) reasonable expected rent (the sum for which property might reasonably be expected…

Section 22 prescribes the closed-list deductions from annual value (computed under s. 21 ) — only two heads: (a) Standard deduction at 30% of annual value (no actual repair receipts required); (b) Interest on borrowed capital (subject to…

Section 23 is the timing-shift provision for arrears of rent and unrealised rent recovered in a subsequent year. The recovered amount is taxable in the year of receipt regardless of when the rent originally accrued — preventing assessee…

Section 24 governs the income-tax treatment of property co-owned by two or more persons whose shares are definite and ascertainable. Each co-owner's share is computed and assessed separately — the co-owners are NOT taxed as an Association…

Section 25 enumerates five categories of deemed-owner — situations where a person is taxed as the OWNER of a house property for s. 20 charge purposes, even where legal title rests elsewhere. These deeming rules cover: (a) intra-family…

Section 26 is the charging section for the PGBP head — the most extensive computation regime in Chapter IV. It catches profits / gains of business carried on at any time during the tax year, plus eight enumerated categories of receipts…

Section 27 is the framework provision establishing the methodology for computing PGBP income — by reference to ss. 28-44, the ensuing computational provisions for deductions / disallowances / depreciation / cost / valuation. STATUTORY…

Section 28 prescribes deduction for rent, rates, taxes, current repairs, and insurance premiums on premises / plant & machinery / furniture used for business. The substantive rule: revenue expenditure deductible; capital expenditure…

Section 29 covers deductions for employer contributions to employee welfare funds — recognised provident fund, approved superannuation, gratuity fund (employer-side; employee-side u/s 7); bonus / commission; staff welfare expenditure.…

Section 30 prescribes specific deductions for insurance premium and Keyman insurance premium paid by the assessee in connection with business / profession. The substantive rule: insurance premium for protection of business assets /…

Section 31 prescribes deductions for bad debts written off (general assessees) and provision for bad and doubtful debts (banks / financial institutions, subject to caps). The substantive rule for general assessees: write-off in books is…

Section 32 catalogues ELEVEN specific deduction categories under the PGBP head -- the substantive equivalent of 1961 ss. 36(1)(i)-(xv). These are deductions ALLOWED in addition to / outside the general 'wholly and exclusively for the…

Section 33 is the depreciation provision — the most-litigated computational rule in PGBP. It extends to four asset classes: buildings, plant, machinery, and furniture (tangible); plus intangible assets (know-how, patents, trademarks)…

Section 34 prescribes the general conditions for any deduction under ss. 28-32 — common conditions including ownership of asset, business-use connection, and consistency of method. It serves as a procedural guard-rail across all PGBP…

Section 35 is the master disallowance provision under PGBP -- substantive equivalent of 1961 ss. 40 / 40A / 40(b) consolidated. The opening words 'Irrespective of any other provision of Chapter IV-D' make this a NON-OBSTANTE clause…

Section 36 is the substantive equivalent of 1961 s. 40 A — covering excessive related-party payments, cash payments above prescribed thresholds, gratuity provisions (only contribution to approved fund qualifies), non-statutory welfare…

Section 37 is the substantive equivalent of 1961 s. 43 B — overriding the mercantile method by requiring ACTUAL PAYMENT for the enumerated categories: tax / duty / cess (a); employer PF / superannuation / gratuity (b); bonus / commission…

Section 38 is the substantive equivalent of 1961 s. 41 — catching certain receipts that are deemed profits even where there is no current-year business activity OR where the receipt is technically a recovery rather than fresh profit.…

Section 39 prescribes the methodology for computing 'actual cost' of an asset for depreciation purposes — substantive equivalent of 1961 s. 43(1) . The substantive rule (sub-sections (1)-(3)): actual cost = purchase price + freight +…

Section 40 prescribes the special-cost-of-acquisition rules for assets acquired by gift / will / inheritance / amalgamation / demerger / etc. — situations where there is no actual cost paid. The substantive rule: cost is the previous…

Section 41 is the substantive equivalent of 1961 s. 43(6) -- the WDV-mechanics provision that operationalises depreciation accounting for tax purposes. Eleven sub-sections cover: (1) basic WDV definition; the central [(A-D)+B-C]-E…

Section 42 prescribes the treatment of forex fluctuation on borrowings used to acquire imported capital assets — the substantive equivalent of 1961 s. 43 A. Where forex liability for asset acquisition increases due to rupee depreciation,…

Section 43 prescribes the treatment of forex fluctuation on revenue items (trade receivables / payables / current monetary assets) — the substantive equivalent of 1961 s. 43 AA / ICDS VI. Forex gains / losses on revenue items are…

Section 44 is the substantive equivalent of 1961 s. 35 D -- the 5-year amortisation regime for PRE-COMMENCEMENT and EXTENSION-OF-UNDERTAKING preliminary expenses. Pre-1976, such expenses were treated as enduring-benefit capital…

Section 45 is the substantive equivalent of 1961 ss. 35 (and partial 35(2AB), 35(2AA), 35(1)(ii)/(iii)) -- the R&D deduction regime under PGBP. The 2025 Act consolidates SIX separate 1961 provisions into a single section. ELEVEN…

Section 46 prescribes the 100% upfront deduction for capital expenditure incurred for setting up and operating 'specified businesses' — substantive equivalent of 1961 s. 35 AD. The list of specified businesses includes: cold-chain…

Section 47 prescribes 150% / 100% deduction (post FA 2016 sunset to 100%) for expenditure on agricultural-extension projects (1961 s. 35 CCC) and skill-development projects (1961 s. 35 CCD). The deductions are aimed at incentivising rural…

Section 48 prescribes a special-deduction regime for assessees engaged in the business of growing and manufacturing tea / coffee / rubber in India — substantive equivalent of 1961 s. 33 AB. Up to 40% of profits (or actual deposit,…

Section 49 prescribes a profit-deferral incentive for assessees engaged in prospecting / extracting / producing petroleum / natural gas — substantive equivalent of 1961 s. 33 ABA. Up to 20% of profits, deposited with SBI in approved Site…

Section 50 is the substantive equivalent of 1961 s. 44 A. Where a 'specified association' (trade / professional / similar association — excluded from Schedule III, Table, Sl. No. 24) has subscriptions/receipts from members falling short…

Section 51 is the substantive equivalent of 1961 s. 35 E -- the 10-year amortisation regime for mineral prospecting expenditure. The mining industry is characterised by long lead-times and high upfront prospecting costs; many prospecting…

Section 52 consolidates the discrete amortisation provisions of the 1961 Act — s. 35 DD (amalgamation/demerger expenses, 5-year amortisation), s. 35 DDA (VRS payments, 5-year amortisation), s. 35 ABA (spectrum fee, life-of-spectrum…

Section 53 prescribes that where land or building (other than a capital asset — i.e., held as stock-in-trade) is transferred and the consideration falls short of stamp-duty value, the latter is deemed the full value of consideration for…

Section 54 is the substantive equivalent of 1961 s. 42 — the Production Sharing Contract (PSC) regime. It permits special deductions for assessees engaged in 'specified oil exploration business' — prospecting / extraction / production of…

Section 55 is the substantive equivalent of 1961 s. 44 read with the First Schedule. It carves insurance business — life, general, mutual, co-operative-society — out of the ordinary computation regime: profits and gains are computed…

Section 56 is the substantive equivalent of 1961 s. 43 D — the cash-basis recognition relief for interest on bad / doubtful debts of specified financial institutions (banks, public financial institutions, NBFCs, HFCs, scheduled…

Section 57 is the substantive equivalent of 1961 s. 43 CB. It mandates Percentage-of-Completion Method (PoCM) for construction contracts and long-duration service contracts (> 90 days), and Project-Completion Method for short-duration…

Section 58 consolidates the three presumptive-tax regimes of the 1961 Act — s. 44 AD (small business; 6%/8% of turnover up to ₹2 cr / ₹3 cr); s. 44 AE (transporters; ≤ 10 goods carriages, ₹1000/ton or ₹7500/vehicle); and s. 44 ADA…

Section 59 is the substantive equivalent of 1961 s. 44 DA. Royalty and Fees for Technical Services received by a 'specified assessee' (non-resident with a PE / fixed place of profession in India) — and effectively connected with that PE /…

Section 60 is the substantive equivalent of 1961 s. 44 C. It caps the deduction of HO-expenditure (executive / administrative / general overheads incurred by NR's HO outside India) attributable to India business / profession at 5% of…

Section 61 consolidates several non-resident-specific presumptive regimes of the 1961 Act into a single Table-driven dispensation. Sub-section (1) is non-obstante to ss. 26-54. Sub-section (2) Table covers SIX categories: (1) NR shipping…

Section 62 is the substantive equivalent of 1961 s. 44 AA. It mandates books-of-account for: (i) specified profession (irrespective of receipts); (ii) other business / non-specified profession on threshold tests of income / turnover.…

Section 63 is the substantive equivalent of 1961 s. 44 AB. It mandates audit of accounts by a Chartered Accountant for: (i) businesses with turnover > ₹ 1 crore (or ₹ 10 crore where cash-receipts and cash-payments each ≤ 5%); (ii)…

Section 64 is the substantive equivalent of 1961 s. 44 DB. It governs the continuation of business-profit deductions u/s 33 (depreciation), s. 44 (preliminary expenses), and s. 52(1) Sl. Nos. 1-2 (amalgamation/demerger / VRS) where a…

Section 65 is the definition section for the s. 64 reorganisation regime — substantive equivalent of 1961 s. 44 DB Explanation. It defines: (a) amalgamation; (b) demerger; (c) conversion of co-operative bank to banking company; (d)…

Section 66 is the omnibus interpretation section for Part D — closing-out the PGBP chapter with cross-cutting definitions. It defines 'agreement' (for s. 26(2)(h) tax-deductibility of certain payments), and other technical terms used…

Section 67 is the charging provision for the head 'Capital Gains' — the substantive equivalent of 1961 s. 45 in its entirety (clauses 1, 1A, 1B, 2, 3, 4, 4A, 5, 5A, 5B, 6 collapsed into 18 numbered sub-sections). It is the LONGEST…

Section 68 is the substantive equivalent of 1961 s. 46 . Sub-section (1) — distribution of assets by a company in liquidation to its shareholders is NOT a transfer at the company's level (so no CG charge on the company). Sub-section (2) —…

Section 69 is the substantive equivalent of 1961 s. 46 A. Sub-section (1) — shareholder is taxed under Capital Gains on (consideration received MINUS cost of acquisition) when company buys back its own shares / specified securities.…

Section 70 is the substantive equivalent of 1961 s. 47 — the foundational tax-neutrality provision for restructurings, family-property division, capital-market mechanics, statutory bond regimes, and offshore-fund relocations. It is the…

Section 71 is the substantive equivalent of 1961 s. 47 A -- the WITHDRAWAL-OF-EXEMPTION provision that operates as the CLAW-BACK SISTER of s. 70 (Transactions not regarded as transfer). Where a tax-neutral transfer under s. 70 fails to…

Section 72 is the COMPUTATIONAL CORE of Part E -- the substantive equivalent of 1961 s. 48 in its entirety with all post-1961 accretions including the FA 1992 indexation regime, the FA 1981 / FA 2007 NR foreign-currency conversion rule,…

Section 73 is the substantive equivalent of 1961 s. 49 . It prescribes the cost of acquisition for capital assets acquired through 24 specific 'special modes' — gift / will / inheritance / liquidation / trust / amalgamation / demerger /…

Section 74 is the substantive equivalent of 1961 s. 50 -- the FORCED STCG treatment for depreciable block-of-assets, irrespective of holding period. The non-obstante override of s. 2(101) (holding-period definition) makes ALL gains on…

Section 75 is the substantive equivalent of 1961 s. 50 A. It addresses the case where depreciation has been obtained under s. 33(2) (depreciation on capital asset used in scientific research / specified business) for a capital asset in…

Section 76 is the substantive equivalent of 1961 s. 50 AA -- the FORCED-STCG REGIME for three categories of securities introduced over FA 2023 / FA 2024: (a) MARKET LINKED DEBENTURES (MLDs -- structured debt with returns linked to…

Section 77 is the substantive equivalent of 1961 s. 50 B -- the SLUMP SALE computation regime. SLUMP SALE = transfer of an undertaking / division as a GOING CONCERN for a LUMP-SUM CONSIDERATION without item-wise asset valuation ( s. 2 /…

Section 78 is the substantive equivalent of 1961 s. 50 C -- the ANTI-UNDERVALUATION provision for LAND / BUILDING transfers. Where consideration received is LESS THAN STAMP DUTY VALUE (SDV), the SDV is deemed to be FVOC for s. 72…

ANGEL TAX — Section 56(2)(viib) [now s. 78 A(c)(ii)] ** EDITORIAL CORRECTION FOLDED IN ** — In v1, the angel-tax valuation principle was attributed to Vaani Estates v. CIT (Karnataka HC) — a case which does not exist in any reporter. The…

Section 79 is the substantive equivalent of 1961 s. 50 CA. Where a capital asset, being a SHARE OTHER THAN A QUOTED SHARE, is transferred at consideration < FMV (per prescribed rules), the FMV is deemed FVOC. Sub-section (2) —…

Section 80 is the substantive equivalent of 1961 s. 50 D. Where consideration received / accruing from transfer is NOT ASCERTAINABLE OR CANNOT BE DETERMINED, the FMV-on-transfer-date is deemed FVOC for s. 72 computation. This is a…

Section 81 is the substantive equivalent of 1961 s. 51 . Where a capital asset has, on a previous occasion, been the subject of negotiations for transfer that fell through, and the assessee retained the advance / earnest money received:…

Section 82 is the substantive equivalent of 1961 s. 54 -- THE MOST-UTILISED reinvestment exemption in individual / HUF capital-gains planning. The provision allows individuals / HUFs selling LTCG-eligible residential house property to…

Section 83 is the substantive equivalent of 1961 s. 54 B -- the AGRICULTURAL-LAND-TO-AGRICULTURAL-LAND reinvestment exemption for individuals / HUFs. The provision targets the urban-fringe agricultural land transactions where the land…

Section 84 is the substantive equivalent of 1961 s. 54 D -- the reinvestment exemption for industrial undertakings facing COMPULSORY ACQUISITION of their land / building / rights therein. The compulsory acquisition (under any law -- LAA…

Section 85 is the substantive equivalent of 1961 s. 54 EC. Where LTCG arises from transfer of land or building (or both) and the assessee invests within 6 months in 'long-term specified asset' (NHAI / REC / IRFC / PFC bonds — typically…

Section 86 is the substantive equivalent of 1961 s. 54 F -- the COMPANION reinvestment exemption to s. 82 (residential-house-to-residential-house). Section 86 covers individuals / HUFs whose LTCG arises from transfer of ANY long-term…

Section 87 is the substantive equivalent of 1961 s. 54 G -- a TARGETED RELIEF for industrial undertakings shifting from URBAN AREAS to non-urban areas (decongestion / decentralisation policy intent). The provision allows business…

Section 88 is the substantive equivalent of 1961 s. 54 GA -- the SEZ-DESTINATION VARIANT of the urban-shift CG roll-over exemption. Where industrial undertaking shifts from urban area TO ANY SPECIAL ECONOMIC ZONE (SEZ) -- whether the SEZ…

Section 89 is the substantive equivalent of 1961 s. 54 H. It is a critical procedural relief for compulsory-acquisition reinvestment exemptions (ss. 82, 83, 84, 85 and 86). Where compensation for compulsory acquisition is NOT received on…

Section 90 is the substantive equivalent of 1961 s. 55 — the definitional bedrock of the Capital Gains chapter. Every CG computation under ss. 67-89 ultimately resolves to the variables defined here. The section is structured into TWELVE…

Section 91 is the substantive equivalent of 1961 s. 55 A. It empowers the Assessing Officer to refer the valuation of a capital asset (for FMV / CG-computation purposes) to a Valuation Officer (VO) — when (a) registered-valuer-claimed FMV…

Section 92 is the substantive equivalent of 1961 s. 56 — the residual / catch-all charging provision and one of the most-litigated chargeing sections of the Act. Architecture spans 5 sub-sections covering: (i) Sub-s. (1) — RESIDUAL…

Section 93 is the substantive equivalent of 1961 s. 57 . It enumerates allowable deductions while computing income under Other Sources head: (a) for dividends — collection charges; (b) for interest on securities / loans — collection…

Section 94 is the substantive equivalent of 1961 s. 58 . It overlays the s. 93 deduction framework with prohibited / non-deductible items: (a) personal expenses; (b) interest / salary paid OUTSIDE India without TDS or to NR-payee for whom…

Section 95 is the substantive equivalent of 1961 s. 59 . It provides the OS-head recoupment / reversal mechanism — analogous to s. 38 PGBP deemed-profits provision. Where any expenditure / loss / trading liability earlier allowed as a…