September 2025

Undisclosed Investments (Undervalued Assets) Under Section 69B

Tax Ready Reckoner, Unexplained Money

1. Key Features of Section 69B Objective: Targets underreported investmentswhere actual expenditure > recorded value in books. Deemed Income: Difference between actual costand recorded value is taxable. Burden of Proof: Assessee must justify the lower valuationor face additions. Tax Rate: Normal slab rates (not 115BBE) unless proven as unexplained income. 2. When Does Section 69B Apply? Investment Exists(property, gold, shares, […]

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Unexplained Expenditure Under Section 69C

Tax Ready Reckoner, Unexplained Money

1. Key Features of Section 69C Objective: Targets unexplained expenseswhere the assessee cannot prove the source of funds. Deemed Income: The entire unexplained expenditure is treated as taxable income. Burden of Proof: The assessee must justify the source of fundsfor the expense. Tax Rate: Normal Cases: Taxed at applicable slab rates. If linked to undisclosed income: 60% +

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Section 69D: Amount Borrowed or Repaid on Hundi

Tax Ready Reckoner, Unexplained Money

Section 69D targets hundi transactions (an informal financial instrument) conducted without banking channels, treating such amounts as taxable income if repaid or borrowed in cash. 1. Key Provisions Applicability: Borrowing or repayingany amount on a hundi without an account payee cheque/bank draft. Includes interest paymentson such borrowings. Deemed Income: The amount is treated as income of the borrower/repayerin the year of

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Section 115BBE: Taxation of Unexplained Income in Business & Profession

Tax Ready Reckoner, Unexplained Money

Section 115BBE of the Income Tax Act, 1961 imposes a flat 60% tax rate (plus 25% surcharge and 4% cess, totaling 77.25%) on unexplained income falling under Sections 68 to 69D, including income classified under “Profits and Gains of Business or Profession” (PGBP). 1. Applicability to PGBP Section 115BBE applies to unexplained income detected in business/profession if: Income is unaccounted(not recorded in books or tax

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Set Off or Carry Forward and Set Off of Losses [Section 70 to 80]

Set Off or Carry Forward of Losses, Tax Ready Reckoner /

The Income Tax Act, 1961 provides detailed provisions under Sections 70 to 80 for setting off and carrying forward of losses, which are crucial for tax planning and reducing tax liability. These provisions allow taxpayers to adjust current year losses against other income in the same year (set-off) or carry forward unadjusted losses to future

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Set Off of Loss from One Source Against Income from Another Source Under the Same Head of Income [Section 70]

Set Off or Carry Forward of Losses, Tax Ready Reckoner /

Section 70 of the Income Tax Act, 1961, allows taxpayers to adjust losses from one source against income from another source under the same head of income in the same financial year. This is known as intra-head adjustment or inter-source adjustment. Key Features of Section 70 Applies to losses under the same head of income(e.g., business losses adjusted against business profits,

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Set Off of Loss from one Head against income from another Head (Inter-Head Adjustment) [Section 71]

Set Off or Carry Forward of Losses, Tax Ready Reckoner /

Understanding Section 71: Inter-Head Adjustment Section 71 of the Income Tax Act, 1961 allows taxpayers to set off losses from one head of income against income from another head in the same financial year. This is called inter-head adjustment and comes into play after intra-head adjustment (Section 70) has been exhausted. Key Features of Section 71 Order of Application: First apply intra-head

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Carry Forward and Set Off of Losses under Income Tax Act

Set Off or Carry Forward of Losses, Tax Ready Reckoner /

1. Introduction to Loss Carry Forward When losses cannot be fully adjusted in the same financial year, the Income Tax Act allows taxpayers to carry forward these losses to future years for set-off against eligible income. The rules vary based on the type of loss. 2. Key Provisions for Carry Forward & Set Off A.  Business Losses

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Carry Forward and Set Off of Loss from House Property [Section 71B]

Set Off or Carry Forward of Losses, Tax Ready Reckoner /

Section 71B of the Income Tax Act, 1961, governs the carry forward and set-off of losses from house property, allowing taxpayers to optimize their tax liability by adjusting current-year losses against future income. Below is a detailed breakdown of the provisions: 1. Understanding Loss from House Property A loss under the head “Income from House Property”

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Carry Forward and Set Off of Business Losses [Section 72]

Set Off or Carry Forward of Losses, Tax Ready Reckoner /

Section 72 of the Income Tax Act, 1961, governs the carry forward and set-off of business losses, allowing taxpayers to adjust current-year losses against future profits. Below is a detailed breakdown of the provisions, conditions, and recent amendments: 1. Key Provisions of Section 72 A.  Eligibility for Carry Forward Applies to non-speculative business losses(speculative losses are covered

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