Section 93 — Deductions in Other Sources | ITA 2025

Section 93 — DEDUCTIONS UNDER OTHER SOURCES

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 charges and interest paid on borrowings used to acquire securities yielding the income; (c) for income from machinery / plant / furniture / building hire — depreciation, repairs, insurance; (d) for family-pension — 1/3rd of pension OR ₹ 25,000 (whichever lower); (e) for any other income — expenditure (other than capital) wholly and exclusively laid out for the purpose of earning the income.

Statutory text — Income-tax Act, 2025

Marginal note — Deductions

(1) The income chargeable under the head “Income from other sources” shall be computed after making the following deductions:— 10b[(a) for interest on securities, any reasonable sum paid as commission or remuneration to a banker or any other person for the purpose of realising such interest on behalf of the assessee;]

(b) for income of the nature referred to in section 92(2)(c), so far as may be, an amount as per section 29(1)(e);

(c) for income of the nature referred to in section 92(2)(f) and (g), so far as may be, an amount as per section 28(1)(a), (b), (d), section 33, and subject to the provisions of section 28(2);

(d) for income in the nature of family pension (a regular monthly amount payable by the employer to a family member of an employee upon the death of such employee),—

(i) an amount equal to one-third of such income or ` 25000, whichever is less, where income-tax is computed under section 202(1); and

(ii) an amount equal to one-third of such income or ` 15000, whichever is less, in any other case; 10b. Substituted by the Finance Act, 2026, w.e.f. 1-4-2026. Prior to its substitution, clause (a) read as under : “(a) for dividends [excluding those referred to in section 2(40)(f)] or interest on securi- ties, any reasonable sum paid as commission or remuneration to a banker or any other person for the purpose of realising such dividend or interest on behalf of the assessee;”

(e) any other expenditure (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for making or earning such income;

(f) for income of the nature referred to in section 92(2)(i), an amount equal to 50% of such income and no other deduction shall be allowed under this section;

(g) for income in the nature of commutation of pension received from a fund as specified in Schedule VII (Table: Sl. No. 3), the entire amount;

(h) for income in the nature of gratuity as referred in section 19(2)(g), re- ceived on the death of the employee, the entire amount. 10c[(2) Irrespective of anything contained in sub-section (1), in respect of any dividend income or income from units of a Mutual Fund specified under Schedule VII (Table:

Sl. No. 20 or 21) or income from units of a specified company as referred to in section 2(h) of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002), no deduction shall be allowed.]

Corresponding provision — 1961 regime

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
INCOME-TAX ACT, 2025 — s. 93	INCOME-TAX ACT, 1961 — s. 57
Dividend collection charges	1961 s. 57(i)
Interest borrowed for income-producing securities	1961 s. 57(iii)
Hire of plant/machinery/furniture/building — depreciation, repairs, insurance	1961 s. 57(ii)/(iia)
Family pension — 1/3rd or ₹ 25,000 lower	1961 s. 57(iia) (FA 2023 raised from ₹ 15,000 to ₹ 25,000)
Residual: any other expenditure wholly & exclusively for earning income	1961 s. 57(iii)

STATUTORY ARCHITECTURE

Section 93 mirrors the deductibility framework of PGBP / HP for OS-head receipts. Three structured deductions: (i) Income-source-specific (dividend collection, securities interest, hire-asset depreciation/repairs/insurance, family pension); (ii) RESIDUAL DEDUCTION (any other expenditure wholly and exclusively for earning the income — the OS analogue of s. 26 PGBP/s. 23 HP). Capital expenditure is EXCLUDED — only revenue expenditure qualifies. Family-pension special deduction: 1/3rd of pension OR ₹ 25,000 (post FA 2023 enhancement; was ₹ 15,000), whichever lower.

CASE LAW

CIT v. Rajendra Prasad Moody (SC) — 'wholly and exclusively' for purpose of earning income — interest on borrowing to acquire shares deductible from dividend even if no dividend declared in current year (purpose-test, not result-test). CIT v. P. Doraiswamy Chetty (SC) — collection charges for dividend deductible u/s 57(i) [now s. 93]. ITAT (various) — depreciation on machinery let-out u/s 56(2)(ii) [now s. 92(2)] is at PGBP rates u/s 33.

PLANNING NOTES

(i) For interest-on-borrowing-for-share-investment, document the purpose at borrowing — Rajendra Prasad Moody allows even prospective dividend earning. (ii) For let-out machinery/plant/furniture (old s. 32 / s. 56 mix), claim s. 33-rate depreciation under s. 93. (iii) For family pension recipients, opt for the higher of 1/3rd of pension OR ₹ 25,000 deduction. (iv) Residual deduction (sub-section (e) successor) — maintain expenditure-wise documentation linking each cost to specific income head.

CROSS-REFERENCES

Section 92 — Other Sources charging.
Section 94 — Amounts not deductible (overlay).
Section 33 — Depreciation rates (relevant for hire-asset deduction).

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