Section 107 — Charge of tax
Old Act equivalent: Section 115BBE of IT Act 1961 Sub-part: Chapter VI — Aggregation of Income
Statutory Text
Income referred to in sections 102, 103, 104, 105 and 106 shall be charged to tax as per the provisions of section 195.
Key Structure
- Applies to: All unexplained income under sections 102–106
- Tax rate: As per section 195 — which charges tax at 60% plus surcharge of 25% (effective rate ~78.5% including cess)
- No deductions: No exemption, deduction, or set-off is allowed against this income
Cross-References
- s102-unexplained-credits to s106-hundi-borrowing — Sections 102–106: the income categories charged under this section
- s195-tax-sections-102-106 — Section 195: tax rate provisions (60% + 25% surcharge)
Practical Notes
- This is a short but critical linking provision: it ensures that all unexplained income is taxed at the penal rate under section 195, not at normal slab rates.
- The effective tax rate is approximately 78.5% (60% + 25% surcharge on 60% = 15% + 4% cess on 75% = 3%), making unexplained income one of the most heavily taxed categories.