Income Tax Act, 2025
Section 4: Ins. by Act 18 of 2008, s. 9 (w.e.f. 12009).
4. Ins. by Act 18 of 2008, s. 9 (w.e.f. 12009).
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Explanation.—For the purposes of this clause, the expressions “securities transaction tax”
and “taxable securities transaction” shall have the meanings respectively assigned to them under
Chapter VII of the Finance (No. 2) Act, 2004 (23 of 2004);
1[(xvi) an amount equal to the commodities transaction tax paid by the assessee in respect of
the taxable commodities transactions entered into in the course of his business during the
previous year, if the income arising from such taxable commodities transactions is included in the
income computed under the head “Profits and gains of business or profession”.
Explanation.—For the purposes of this clause, the expressions “commodities transaction tax”
and “taxable commodities transaction” shall have the meanings respectively assigned to them
under Chapter VII of the Finance Act, 2013;]]
2[(xvii) the amount of expenditure incurred by a co-operative society engaged in the business
of manufacture of sugar for purchase of sugarcane at a price which is equal to or less than the
price fixed or approved by the Government.]
3[(xviii) marked to market loss or other expected loss as computed in accordance with the
income computation and disclosure standards notified under sub-section (2) of section 145.]
(2) In making any deduction for a bad debt or part thereof, the following provisions shall apply—
4[(i) no such deduction shall be allowed unless such debt or part thereof has been taken into
account in computing the income of the assessee of the previous year in which the amount of such
debt or part thereof is written off or of an earlier previous year, or represents money lent in the
ordinary course of the business of banking or money-lending which is carried on by the assessee;]
(ii) if the amount ultimately recovered on any such debt or part of debt is less than the difference
between the debt or part and the amount so deducted, the deficiency shall be deductible in the
previous year in which the ultimate recovery is made;
(iii) any such debt or part of debt may be deducted if it has already been written off as
irrecoverable in the accounts of an earlier previous year 5[(being a previous year relevant to the
assessment year commencing on the 1st day of April, 1988, or any earlier assessment year)], but the
6[Assessing Officer] had not allowed it to be deducted on the ground that it had not been established
to have become a bad debt in that year;
(iv) where any such debt or part of debt is written off as irrecoverable in the accounts of the
previous year 5[(being a previous year relevant to the assessment year commencing on the 1st day of
April, 1988, or any earlier assessment year)] and the 6[Assessing Officer] is satisfied that such debt or
part became a bad debt in any earlier previous year not falling beyond a period of four previous years
immediately preceding the previous year in which such debt or part is written off, the provisions of
sub-section (6) of section 155 shall apply;
7[(v) where such debt or part of debt relates to advances made by an assessee to which
clause (viia) of sub-section (1) applies, no such deduction shall be allowed unless the assessee has
debited the amount of such debt or part of debt in that previous year to the provision for bad and
doubtful debts account made under that clause.]
an amount equal to the commodities transaction tax paid by the assessee in respect of
the taxable commodities transactions entered into in the course of his business during the
previous year, if the income arising from such taxable commodities transactions is included in the
income computed under the head “Profits and gains of business or profession”.
Explanation.—For the purposes of this clause, the expressions “commodities transaction tax”
and “taxable commodities transaction” shall have the meanings respectively assigned to them
under Chapter VII of the Finance Act, 2013;]]
2[
the amount of expenditure incurred by a co-operative society engaged in the business
of manufacture of sugar for purchase of sugarcane at a price which is equal to or less than the
price fixed or approved by the Government.]
3[
marked to market loss or other expected loss as computed in accordance with the
income computation and disclosure standards notified under sub-section
of section 145.]
In making any deduction for a bad debt or part thereof, the following provisions shall apply—
4[
no such deduction shall be allowed unless such debt or part thereof has been taken into
account in computing the income of the assessee of the previous year in which the amount of such
debt or part thereof is written off or of an earlier previous year, or represents money lent in the
ordinary course of the business of banking or money-lending which is carried on by the assessee;]
if the amount ultimately recovered on any such debt or part of debt is less than the difference
between the debt or part and the amount so deducted, the deficiency shall be deductible in the
previous year in which the ultimate recovery is made;
any such debt or part of debt may be deducted if it has already been written off as
irrecoverable in the accounts of an earlier previous year 5[(being a previous year relevant to the
assessment year commencing on the 1st day of April, 1988, or any earlier assessment year)], but the
6[Assessing Officer] had not allowed it to be deducted on the ground that it had not been established
to have become a bad debt in that year;
where any such debt or part of debt is written off as irrecoverable in the accounts of the
previous year 5[(being a previous year relevant to the assessment year commencing on the 1st day of
April, 1988, or any earlier assessment year)] and the 6[Assessing Officer] is satisfied that such debt or
part became a bad debt in any earlier previous year not falling beyond a period of four previous years
immediately preceding the previous year in which such debt or part is written off, the provisions of
sub-section
of section 155 shall apply;
7[
where such debt or part of debt relates to advances made by an assessee to which
clause
of sub-section
applies, no such deduction shall be allowed unless the assessee has
debited the amount of such debt or part of debt in that previous year to the provision for bad and
doubtful debts account made under that clause.]