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Income-tax Act, 2025
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Act No. 30 of 2025 · Act structure
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23 chapters · 536 sections. Tap a division to reveal its provisions.
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Preliminary
Basis of Charge
Incomes Which Do Not Form Part of Total Income
Computation of Total Income
Chapter 4 overview
- Heads of income
- Income not forming part of total income and expenditure in relation to such income
- Salaries
- Income from salary
- Perquisite
- Profits in lieu of salary
- Deductions from salaries
- Income from house property
- Determination of annual value
- Deductions from income from house property
- Arrears of rent and unrealised rent received subsequently
- Property owned by co-owners
- Interpretation
- Income under head “Profits and gains of business or profession”
- Manner of computing profits and gains of business or profession
- Rent, rates, taxes, repairs and insurance
- Deductions related to employee welfare
- Deduction on certain premium
- Deduction for bad debt and provision for bad and doubtful debt
- Other deductions
- Deduction for depreciation
- General conditions for allowable deductions
- Amounts not deductible in certain circumstances
- Expenses or payments not deductible in certain circumstances
- Certain deductions allowed on actual payment basis only
- Certain sums deemed as profits and gains of business or profession
- Computation of actual cost
- Special provision for computation of cost of acquisition of certain assets
- Written down value of depreciable asset
- Capitalising the impact of foreign exchange fluctuation
- Taxation of foreign exchange fluctuation
- Amortisation of certain preliminary expenses
- Expenditure on scientific research
- Capital expenditure of specified business
- Expenditure on agricultural extension project and skill development project
- Tea development account, coffee development account and rubber development account
- Site Restoration Fund
- Special provision in the case of trade, profession or similar association
- Amortisation of expenditure for prospecting certain minerals
- Amortisation of expenditure for telecommunications services, amalgamation, demerger, scheme of voluntary retirement, etc
- Full value of consideration for transfer of assets other than capital assets in certain cases
- Business of prospecting for mineral oils
- Insurance business
- Special provision in case of interest income of specified financial institutions
- Revenue recognition for construction and service contracts
- Special provision for computing profits and gains of business or profession on presumptive basis in case of certain residents
- Chargeability of royalty and fee for technical services in hands of non-residents
- Deduction of head office expenditure in case of non-residents
- Special provision for computation of income on presumptive basis in respect of certain business activities of certain non-residents
- Maintenance of books of account
- Tax audit
- Facilitating payments in electronic modes
- Special provision for computing deductions in case of business reorganisation of co-operative banks
- Interpretation
- Capital gains
- Capital gains on distribution of assets by companies in liquidation
- Capital gains on purchase by company of its own shares or other specified securities
- Transactions not regarded as transfer
- Withdrawal of exemption in certain cases
- Mode of computation of capital gains
- Cost with reference to certain modes of acquisition
- Special provision for computation of capital gains in case of depreciable assets
- Special provision for cost of acquisition in case of depreciable asset
- Special provision for computation of capital gains in case of Market Linked Debenture
- Special provision for computation of capital gains in case of slump sale
- Special provision for full value of consideration in certain cases
- Special provision for full value of consideration for transfer of share other than quoted share
- Fair market value deemed to be full value of consideration in certain cases
- Advance money received
- Profit on sale of property used for residence
- Capital gains on transfer of land used for agricultural purposes not to be charged in certain cases
- Capital gains on compulsory acquisition of lands and buildings not to be charged in certain cases
- Capital gains not to be charged on investment in certain bonds
- Capital gains on transfer of certain capital assets not to be charged in case of investment in residential house
- Exemption of capital gains on transfer of assets in cases of shifting of industrial undertaking from urban area
- Exemption of capital gains on transfer of assets in cases of shifting of industrial undertaking from urban area to any Special Economic Zone
- Extension of time for acquiring new asset or depositing or investing amount of capital gains
- Meaning of “adjusted”, “cost of improvement” and “cost of acquisition”
- Reference to Valuation Officer
- Income from other sources
- Deductions
- Amounts not deductible
- Profits chargeable to tax
Income of Other Persons, Included in Total Income of Assessee
Aggregation of Income
Set Off, Or Carry Forward and Set Off of Losses
Chapter 7 overview
- Set off of losses under the same head of income
- Set off of losses under any other head of income
- Carry forward and set off of loss from house property
- Carry forward and set off of loss from capital gains
- Carry forward and set off of business loss
- Set off and carry forward of losses from speculation business
- Set off and carry forward of losses from specified business
- Set off and carry forward of losses from specified activity
- Treatment of accumulated losses and unabsorbed depreciation in amalgamation or demerger, etc
- Treatment of accumulated losses and unabsorbed depreciation in scheme of amalgamation in certain cases
- Carry forward and set off of losses and unabsorbed depreciation in business reorganisation of co-operative banks
- Carry forward and set off of losses not permissible in certain cases
- No set off of losses against undisclosed income consequent to search, requisition and survey
- Submission of return for losses
Deductions to Be Made in Computing Total Income
Chapter 8 overview
- Deductions to be made in computing total income
- Deduction for life insurance premia, deferred annuity, contributions to provident fund, etc
- Deduction in respect of employer contribution to pension scheme of Central Government
- Deduction in respect of contribution to Agnipath Scheme
- Deduction in respect of health insurance premia
- Deduction in respect of maintenance including medical treatment of a dependant who is a person with disability
- Deduction in respect of medical treatment, etc
- Deduction in respect of interest on loan taken for higher education
- Deduction in respect of interest on loan taken for residential house property
- Deduction in respect of interest on loan taken for certain house property
- Deduction in respect of purchase of electric vehicle
- Deduction in respect of donations to certain funds, charitable institutions, etc
- Deductions in respect of rents paid
- Deduction in respect of certain donations for scientific research or rural development
- Deduction in respect of contributions given by companies to political parties
- Deduction in respect of contributions given by any person to political parties
- Deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc
- Deductions in respect of profits and gains by an undertaking or enterprise engaged in development of Special Economic Zone
- Special provision in respect of specified business
- Deduction in respect of profits and gains from certain industrial undertakings
- Deductions in respect of profits and gains from housing projects
- Special provisions in respect of certain undertakings in North-Eastern States
- Special provisions in respect of newly established Units in Special Economic Zones
- Deduction for businesses engaged in collecting and processing of bio-degradable waste
- Deduction in respect of additional employee cost
- Deductions for income of Offshore Banking Units and Units of International Financial Services Centre
- Deduction in respect of certain inter-corporate dividends
- Deduction in respect of income of co-operative societies
- Deduction in respect of certain income of Producer Companies
- Deduction in respect of royalty income, etc., of authors of certain books other than text-books
- Deduction in respect of royalty on patents
- Deduction for interest on deposits
- Deduction in case of a person with disability
Rebates and Reliefs
Chapter 9 overview
- Rebate to be allowed in computing income-tax
- Rebate of income-tax in case of certain individuals
- Relief when salary, etc., is paid in arrears or in advance
- Relief from taxation in income from retirement benefit account maintained in a notified country
- Agreement with foreign countries or specified territories and adoption by Central Government of agreement between specified associations for double taxation relief
- Countries with which no agreement exists
Special Provisions Relating to Avoidance of Tax
Chapter 10 overview
- Computation of income from international transaction and specified domestic transaction having regard to arm’s length price
- Meaning of associated enterprise
- Meaning of international transaction
- Meaning of specified domestic transaction
- Determination of arm’s length price
- Reference to Transfer Pricing Officer
- Power of Board to make safe harbour rules
- Advance pricing agreement
- Effect to advance pricing agreement
- Secondary adjustment in certain cases
- Maintenance, keeping and furnishing of information and document by certain persons
- Report from an accountant to be furnished by persons entering into international transaction or specified domestic transaction
- Definitions of certain terms relevant to determination of arm’s length price, etc
- Avoidance of income-tax by transactions resulting in transfer of income to non-residents
- Avoidance of tax by certain transactions in securities
- Special measures in respect of transactions with persons located in notified jurisdictional area
- Limitation on interest deduction in certain cases
General Anti-Avoidance Rule
Mode of Payment in Certain Cases, Etc
Determination of Tax in Special Cases
Chapter 13 overview
- Determination of tax where total income includes income on which no tax is payable
- Tax on accumulated balance of recognised provident fund
- Tax in case of block assessment of search cases
- Tax on income from Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer
- Tax on certain incomes
- Tax on income referred to in section 102 or 103 or 104 or 105 or 106
- Tax on short-term capital gains in certain cases
- Tax on long-term capital gains
- Tax on long-term capital gains in certain cases
- Tax on income of certain manufacturing domestic companies
- Tax on income of certain domestic companies
- Tax on income of new manufacturing domestic companies
- New tax regime for individuals, Hindu undivided family and others
- Tax on income of certain resident co-operative societies
- Tax on income of certain new manufacturing co-operative societies
- Conditions for tax on income of certain companies and cooperative societies
- Special provision for minimum alternate tax and alternate minimum tax
- Tax on dividends, royalty and technical service fees in case of foreign companies
- Tax on income from units purchased in foreign currency or capital gains arising from their transfer
- Tax on income from bonds or Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer
- Tax on income of Foreign Institutional Investors from securities or capital gains arising from their transfer
- Tax on non-resident sportsmen or sports associations
- Interpretation
- Special provision for computation of total income of non-residents
- Tax on investment income and long-term capital gains
- Capital gains on transfer of foreign exchange assets not to be charged in certain cases
- Return of income not to be furnished in certain cases
- Benefit to be available in certain cases even after assessee becomes resident
- Provisions not to apply if the assessee so chooses
- Conversion of an Indian branch of foreign company into subsidiary Indian company
- Foreign company said to be resident in India
- Tax on income from securitisation trusts
- Tax on income in case of venture capital undertakings
- Tax on income of unit holder and business trust
- Tax on income of investment fund and its unit holders
- Income from the business of operating qualifying ships
- Tonnage tax scheme
- Computation of tonnage income
- Relevant shipping income and exclusion from book profit
- Depreciation and gains relating to tonnage tax assets
- Exclusion of deduction, loss, set off, etc
- Method of opting of tonnage tax scheme and validity
- Certain conditions for applicability of tonnage tax scheme
- Amalgamation and demerger
- Avoidance of tax and exclusion from tonnage tax scheme
- Interpretation
Tax Administration
Chapter 14 overview
- Income-tax authorities
- Appointment of income-tax authorities
- Control of income-tax authorities
- Instructions to subordinate authorities
- Taxpayer’s Charter
- Jurisdiction of income-tax authorities
- Jurisdiction of Assessing Officers
- Power to transfer cases
- Change of incumbent of an office
- Faceless jurisdiction of income-tax authorities
- Power regarding discovery, production of evidence, etc
- Search and seizure
- Powers to requisition
- Reasons not to be disclosed
- Application of seized or requisitioned assets
- Copying, extraction, retention and release of books of account and documents seized or requisitioned
- Power to call for information
- Powers of survey
- Power to collect certain information
- Power to inspect registers of companies
- Power of competent authority
- Proceedings before income-tax authorities to be judicial proceedings
- Disclosure of information relating to assessees
- Power to call for information by prescribed income-tax authority
- Faceless collection of information
- Interpretation
Return of Income
Procedure For Assessment
Chapter 16 overview
- Inquiry before assessment
- Estimation of value of assets by Valuation Officer
- Assessment
- Best judgment assessment
- Power of Joint Commissioner to issue directions in certain cases
- Faceless Assessment
- Reference to Principal Commissioner or Commissioner in certain cases
- Reference to Dispute Resolution Panel
- Method of accounting
- Method of accounting in certain cases
- Taxability of certain income
- Income escaping assessment
- Issue of notice
- Procedure before issuance of notice under section 280
- Time limit for notices under sections 280 and 281
- Provision for cases where assessment is in pursuance of an order on appeal, etc
- Sanction for issue of notice
- Other provisions
- Time limit for completion of assessment, reassessment and recomputation
- Rectification of mistake
- Other amendments
- Notice of demand
- Modification and revision of notice in certain cases
- Intimation of loss
- Assessment of income pertaining to the block period
- Computation of total income of block period
- Procedure for block assessment
- Undisclosed income of any other person
- Time-limit for completion of block assessment
- Certain interests and penalties not to be levied or imposed
- Levy of interest and penalty in certain cases
- Authority competent to make assessment of block period
- Application of other provisions of Act
- Interpretation
Special Provisions Relating to Certain Persons
Chapter 17 overview
- Legal representative
- Representative assessee
- Liability of representative assessee
- Right of representative assessee to recover tax paid
- Who may be regarded as agent
- Charge of tax where share of beneficiaries unknown
- Charge of tax in case of oral trust
- Method of computing a member's share in income of association of persons or body of individuals
- Share of member of an association of persons or body of individuals in income of association or body
- Charge of tax where shares of members in association of persons or body of individuals unknown, etc
- Executor
- Succession to business or profession otherwise than on death
- Effect of order of tribunal or court in respect of business reorganisation
- Assessment after partition of a Hindu undivided family
- Shipping business of non-residents
- Assessment of persons leaving India
- Assessment of association of persons or body of individuals or artificial juridical person formed for a particular event or purpose
- Assessment of persons likely to transfer property to avoid tax
- Discontinued business
- Association dissolved or business discontinued
- Company in liquidation
- Liability of directors of private company
- Charge of tax in case of a firm
- Assessment as a Firm
- Assessment when section 325 not complied with
- Change in constitution of a firm
- Succession of one firm by another firm
- Joint and several liability of partners for tax payable by firm
- Firm dissolved or business discontinued
- Liability of partners of limited liability partnership in liquidation
- Application for registration
- Switching over of regimes
- Tax on income of registered non-profit organisation
- Regular income
- Taxable regular income
- Specified income
- Income not to be included in regular income
- Corpus donation
- Deemed corpus donation
- Application of income
- Accumulated income
- Deemed accumulated income
- Business undertaking held as property
- Restriction on commercial activities by a registered non-profit organisation
- Restriction on commercial activities by registered non-profit organisation carrying out advancement of any other object of general public utility
- Books of account
- Audit
- Return of income
- Permitted modes of investment
- Specified violation
- Tax on accreted income
- Other violations
- Application for approval for purpose of section 133(1)(b)(ii)
- Interpretation
Appeals, Revision and Alternate Dispute Resolutions
Chapter 18 overview
- Appealable orders before Joint Commissioner (Appeals)
- Appealable orders before Commissioner (Appeals)
- Form of appeal and limitation
- Procedure in appeal
- Powers of Joint Commissioner (Appeals) or Commissioner (Appeals)
- Appellate Tribunal
- Appeals to Appellate Tribunal
- Orders of Appellate Tribunal
- Procedure of Appellate Tribunal
- Appeal to High Court
- Case before High Court to be heard by not less than two Judges
- Appeal to Supreme Court
- Hearing before Supreme Court
- Tax to be paid irrespective of appeal, etc
- Execution for costs awarded by Supreme Court
- Amendment of assessment on appeal
- Exclusion of time taken for copy
- Filing of appeal by income-tax authority
- Interpretation of “High Court”
- Procedure when assessee claims identical question of law is pending before High Court or Supreme Court
- Procedure where an identical question of law is pending before High Courts or Supreme Court
- Revision of orders prejudicial to revenue
- Revision of other orders
- Dispute Resolution Committee
- Interpretation
- Board for Advance Rulings
- Vacancies, etc., not to invalidate proceedings
- Application for advance ruling
- Procedure on receipt of application
- Appellate authority not to proceed in certain cases
- Advance ruling to be void in certain circumstances
- Powers of the Board for Advance Rulings
- Procedure of Board for Advance Rulings
- Appeal
Collection and Recovery of Tax
Chapter 19 overview
- Deduction or collection at source and advance payment
- Direct payment
- Salary and accumulated balance due to an employee
- Tax to be deducted at source
- Collection of tax at source
- Certificates
- Tax deducted is income received
- Compliance and reporting
- Consequences of failure to deduct or pay or, collect or pay
- Processing
- Power of Central Government to relax provisions of this Chapter
- Bar against direct demand on assessee
- Interpretation
- Liability for payment of advance tax
- Conditions of liability to pay advance tax
- Computation of advance tax
- Payment of advance tax by assessee on his own accord
- Payment of advance tax by assessee in pursuance of order of Assessing Officer
- Instalments of advance tax and due dates
- When assessee is deemed to be in default
- Credit for advance tax
- When tax payable and when assessee deemed in default
- Penalty payable when tax in default
- Certificate by Tax Recovery Officer and Validity thereof
- Tax Recovery Officer by whom recovery is to be effected
- Stay of proceedings in pursuance of certificate and amendment or cancellation thereof
- Other modes of recovery
- Recovery through State Government
- Recovery of tax in pursuance of agreements with foreign countries
- Recovery of penalties, fine, interest and other sums
- Tax clearance certificate
- Recovery by suit or under other law not affected
- Recovery of tax arrear in respect of non-resident from his assets
- Interest for defaults in furnishing return of income
- Interest for defaults in payment of advance tax
- Interest for deferment of advance tax
- Interest on excess refund
- Fee for default in furnishing statements
- Fee for default in furnishing return of income
- Fee for default relating to statement or certificate
- Fee for default relating to intimation of aadhaar number
Refunds
Penalties
Chapter 21 overview
- Penalty for under-reporting and misreporting of income
- Immunity from imposition of penalty, etc
- Failure to keep, maintain or retain books of account, documents, etc
- Penalty for failure to keep and maintain information and document, etc., in respect of certain transactions
- Penalty in respect of certain income
- Penalty for false entry, etc., in books of account
- Benefits to related persons
- Failure to get accounts audited
- Penalty for failure to furnish report under section 172
- Penalty for failure to deduct tax at source
- Penalty for failure to collect tax at source
- Penalty for failure to comply with the provisions of section 185
- Penalty for failure to comply with provisions of section 186
- Penalty for failure to comply with provisions of section 187
- Penalty for failure to comply with provisions of section 188
- Penalty for failure to furnish statement of financial transaction or reportable account
- Penalty for furnishing inaccurate statement of financial transaction or reportable account
- Penalty for failure to furnish statement or information or document by an eligible investment fund
- Penalty for failure to furnish information or document under section 171
- Penalty for failure to furnish information or document under section 506
- Penalty for failure to furnish report or for furnishing inaccurate report under section 511
- Penalty for failure to submit statement under section 505
- Penalty for failure to furnish statements, etc
- Penalty for failure to furnish information or furnishing inaccurate information under section 397(3)(d)
- Penalty for furnishing incorrect information in reports or certificates
- Penalty for failure to furnish statements, etc
- Penalty for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections, etc
- Penalty for failure to comply with the provisions of section 254
- Penalty for failure to comply with the provisions of section 262
- Penalty for failure to comply with the provisions of section 397(1)
- Power to reduce or waive penalty, etc., in certain cases
- Penalty not to be imposed in certain cases
- Procedure
- Bar of limitation for imposing penalties
Offences and Prosecution
Chapter 22 overview
- Contravention of order made under section 247
- Failure to comply with section 247(1)(b)(ii)
- Removal, concealment, transfer or delivery of property to prevent tax recovery
- Failure to pay tax to credit of Central Government under Chapter XIX-B
- Failure to pay tax collected at source
- Wilful attempt to evade tax, etc
- Failure to furnish returns of income
- Failure to furnish return of income in search cases
- Failure to produce accounts and documents
- False statement in verification, etc
- Falsification of books of account or document, etc
- Abetment of false return, etc
- Punishment for second and subsequent offences
- Punishment not to be imposed in certain cases
- Offences by companies
- Offences by Hindu undivided family
- Presumption as to assets, books of account, etc., in certain cases
- Presumption as to culpable mental state
- Prosecution to be at instance of Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner
- Certain offences to be non-cognizable
- Proof of entries in records or documents
- Disclosure of particulars by public servants
- Special Courts
- Offences triable by Special Court
- Trial of offences as summons case
- Application of Bharatiya Nagarik Suraksha Sanhita, 2023 to proceedings before Special Court
Miscellaneous
Chapter 23 overview
- Certain transfers to be void
- Provisional attachment to protect revenue in certain cases
- Service of notice, generally
- Authentication of notices and other documents
- Service of notice when family is disrupted or firm, etc., is dissolved
- Service of notice in case of discontinued business
- Submission of statement by a non-resident having liaison office
- Furnishing of information or documents by an Indian concern in certain cases
- Submission of statements by producers of cinematograph films or persons engaged in specified activity
- Obligation to furnish statement of financial transaction or reportable account
- Obligation to furnish information on transaction of crypto-asset
- Annual information statement
- Furnishing of report in respect of international group
- Publication of information respecting assessees in certain cases
- Appearance by registered valuer in certain matters
- Registration of Valuers
- Appearance by authorised representative
- Rounding off of amount of total income, or tax payable or refundable
- Receipt to be given
- Indemnity
- Power to tender immunity from prosecution
- Cognizance of offences
- Probation of Offenders Act, 1958 and section 401 of Bharatiya Nagarik Suraksha Sanhita, 2023, not to apply
- Return of income, etc., not to be invalid on certain grounds
- Notice deemed to be valid in certain circumstances
- Presumption as to assets, books of account, etc
- Authorisation and assessment in case of search or requisition
- Bar of suits in civil courts
- Power to make exemption, etc., in relation to participation in business of prospecting for, extraction, etc., of mineral oils
- Power of Central Government or Board to condone delays in obtaining approval
- Power to withdraw approval
- Act to have effect pending legislative provision for charge of tax
- Power to rescind exemption in relation to certain Union territories already granted under section 294A of the Income-tax Act, 1961
- Power to frame Schemes
- Power to make rules
- Laying before Parliament
- Removal of difficulties
- Repeal and savings. SCHEDULE I SCHEDULE II SCHEDULE III SCHEDULE IV SCHEDULE V SCHEDULE VI SCHEDULE VII SCHEDULE VIII SCHEDULE IX SCHEDULE X SCHEDULE XI SCHEDULE XII SCHEDULE XIII SCHEDULE XIV SCHEDULE XV SCHEDULE XVI