New Provision
Section 81, IT Act 2025
Replaces (IT Act 1961)
51
Chapter
Chapter IV — Computation of Total Income
Effective From
1 April 2026
Statutory Text — Section 81
Where any capital asset was, on any previous occasion, the subject of negotiations for its transfer, any advance or other money received and retained by the assessee in respect of such negotiations–– (a) shall be deducted from the cost for which the asset was acquired or the written down value or the fair market value, as the case may be, in computing the cost of acquisition; (b) shall not be deducted from the said cost, where such advance or other money has been included in the total income of the assessee for any tax year as per the provisions of section 92(2)(h) of this Act or section 56(2)(ix) of the Income-tax Act 1961.
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
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Disclaimer: This is a reproduction of Section 81 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.