New Provision
Section 57, IT Act 2025
Replaces (IT Act 1961)
43CB
Chapter
Chapter IV — Computation of Total Income
Effective From
1 April 2026
Statutory Text — Section 57
(1) The profits and gains arising from a construction contract or a contract for providing services, shall be determined on the basis of percentage of completion method, subject to provisions of sub-section (2), as per the income computation and disclosure standards notified under section 276(2). (2) For the purposes of sub-section (1), the profits and gains arising from a contract for providing services shall be determined— (a) on the basis of project completion method, if the duration of such contract is not more than ninety days; (b) on the basis of straight line method, if the contract involves indeterminate number of acts over a specified period of time. (3) For the purposes of percentage of completion method, project completion method or straight line method under this section,— (a) the contract revenue shall include retention money; (b) the contract costs shall not be reduced by any incidental income in the nature of interest, dividends or capital gains.
CH. IV D.- PROFITS AND GAINS OF BUSINESS OR PROFESSION [Sec 26-66]
Shahi & Co. — Our Understanding
This section falls under Chapter IV which governs the computation of total income under all five heads: Salaries, House Property, Business & Profession, Capital Gains, and Other Sources.
Practical Note: All income earned by a taxpayer in a tax year must be computed under one of these heads. Proper classification determines the applicable deductions, set-off rules, and tax rates.
Shahi & Co., Chartered Accountants
Need guidance on Section 57?
Our Direct Tax team advises individuals, businesses, and start-ups on all provisions of the Income Tax Act, 2025. We help you navigate the transition from the old Act with zero disruption to your compliance calendar.
Consult Our Tax Team →
Disclaimer: This is a reproduction of Section 57 of the Income Tax Act, 2025 (No. 30 of 2025) as published in the Official Gazette of India (CG-DL-E-22082025-265620) for informational and reference purposes only. Shahi & Co., Chartered Accountants makes no warranty as to completeness or accuracy. For the official authenticated text refer to
egazette.gov.in or
incometaxindia.gov.in. This does not constitute legal or tax advice.