Section 59- Profits Chargeable to Tax

#section59 #profits #income #incometax #incometaxact1961

The Income Tax Act, of 1961 is the main statute of Income Tax in India. It provides for levy, administration, collection, and recovery of Income Tax.

According to Section 59 of The Income Tax Act, 1961,

(1) The provisions of sub-section (1) of section 41 shall apply, so for as may be, in computing the income of an assessee under section 56, as they apply in computing the income of an assessee under the head "Profits and gains of business or profession".

(2) When any buildings, machinery, plant or furniture to which clauses (ii) and (iii) of sub-section (2) of section 56 apply are sold, discarded, demolished or destroyed, the provisions of sub-section (2) of section 41 shall apply, so far as may be, in computing the income of an assessee under section 56 as they apply in computing the Income of an assessee under the head "Profits and gains of business or profession".

Explanation. —For the purpose of this section, the expression "sold" shall have the same meaning as in sub-section (1) of section 32.

As per this Section,

While computing income from other sources in case of any allowance or deduction made in any year with respect to any loss, expenditure, or trading liability but later on due to recovery of any amount in cash or any other manner or some account of ceasing of loss, expenditure or trading liability is made, then the same will be chargeable to tax under “Income from Other Sources” as applicable under the head “Profits and Gains of Business or Profession”.