Unexplained investments deemed income: special high-rate tax and penalty apply where books and explanations are unsatisfactory Unexplained investments, bullion, jewellery or other valuable articles exceeding amounts recorded in books may be deemed income if the assessee gives no satisfactory explanation. Such deemed income is taxed under a special high-rate regime with no deduction or set-off allowed, subject to an additional surcharge, and authorities may impose a further penalty on the tax payable unless the income was disclosed and taxed under the special regime in the return.