Section 95 — Profits chargeable to tax
Old Act equivalent: Section 59 of IT Act 1961 Sub-part: F.—Income from other sources
Statutory Text
The provision of section 38(1), (2), (3) and (4) shall apply in computing the income of an assessee under section 92, as they apply in computing the income of an assessee under the head “Profits and gains of business or profession”.
Sub-sections
This section has no sub-sections — it is a single application clause.
Provisos
None.
Explanations
None.
Tables
None.
Key Structure
- Applies to: All assessees computing income under section 92 (Other Sources)
- Effect: Section 38(1), (2), (3) and (4) — “deemed profits and gains” provisions from PGBP — apply equally to other sources income
- Section 38 provisions imported:
- (1) Recovery of amounts previously allowed as deduction — deemed income in year of recovery
- (2) Balancing charge on sale/discard of depreciable assets (where depreciation was claimed under other sources)
- (3) Successor in business — deemed profits on recovery
- (4) Insurance/salvage moneys received for assets used for other sources income
- Monetary limits: None
Cross-References
- s092-charging — Section 92: charging section for other sources income
- s038-certain-sums-deemed-as-profits-and-gains-of-business-or-prof — Section 38: deemed profits and gains (the provision being imported)
- s093-deductions — Section 93: deductions (these deemed profits are computed after deductions under section 93)
- s094-amounts-not-deductible — Section 94: amounts not deductible
Amendment Notes
None noted from the extracted pages.
Practical Notes
- This is a short but important provision: it ensures that recovery of amounts previously deducted under other sources (e.g., recovery of bad debts previously written off, insurance proceeds for assets on which depreciation was claimed under hire income) are brought back to tax.
- Particularly relevant for assessees who let out machinery/plant/furniture (section 92(2)(f)/(g)) and claim depreciation under section 93(1)(c) — if the asset is later sold at a profit above WDV, the balancing charge under section 38(2) applies.
- The deemed profits provision is a mirror of the PGBP treatment — ensuring parity between business income and other sources income for recovery/balancing charge situations.