TaxTMI 
TaxTMI 
Deductions available under "Income from other sources" in Clause 93 of Income Tax Bill, 2025 VS. Section 56 of Income Tax Act, 1961
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....tax code to reflect contemporary economic realities and policy objectives. Conversely, Section 57 of the Income-tax Act, 1961, has long governed the deductions available under "Income from other sources." This statutory provision has been pivotal in shaping the tax obligations of individuals and entities earning income outside the primary business or employment income. The comparison and analysis of these two provisions are critical to understanding the evolution of tax law and its implications for taxpayers. Objective and Purpose The legislative intent behind Clause 93 of the Income Tax Bill, 2025, is to streamline and specify the deductions available for income categorized under "Income from other sources." The clause aims to provide cl....
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....e 29(1)(e) and 28(1)(a), (b), (d). This cross-referencing indicates an integrated approach to deductions, ensuring consistency across different income types. - The inclusion of references to other sections suggests an intent to harmonize provisions and avoid conflicting interpretations. 3. **Family Pension**: - Clause 93(1)(d) offers a deduction for family pensions, with specific limits based on whether the tax is computed u/s 202(1). This reflects a policy choice to provide relief to beneficiaries of family pensions, recognizing the financial impact of losing a family member. 4. **Other Expenditures**: - Clause 93(1)(e) allows for deductions of expenditures not being capital in nature, laid out exclusively for earning income. This ....
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....llowing deductions for non-capital expenditures incurred wholly for earning income. This provision underscores the principle of recognizing legitimate income-related expenses. 5. **Specific Income Deductions**: - Section 57(iv) parallels Clause 93(1)(f) by offering a 50% deduction for specific income types, indicating a simplified approach to such deductions. 6. **Dividend Income Restrictions**: - The provisos in Section 57 impose similar restrictions on deductions for dividend income as Clause 93(2), underscoring a consistent policy to limit excessive deductions and maintain a fair tax base. Practical Implications The practical implications of Clause 93 and Section 57 are significant for taxpayers, tax practitioners, and regulators....