Section 95 - Profits chargeable to tax
Business-income recapture provisions apply to specified other-source activities, ensuring recoveries and cessation amounts are brought to tax consistently.
Reviewed by CA Nikhil Gupta · Updated 9 October 2026
Section 95 is presented using the consolidated Income-tax Act, 2025 as amended by the Finance Act, 2026. The general commencement date is 1 April 2026. Earlier years and saved proceedings may remain governed by the Income-tax Act, 1961 and the repeal/savings framework.
2-minute professional decode
Business-income recapture provisions apply to specified other-source activities, ensuring recoveries and cessation amounts are brought to tax consistently.
Who should test this section?
Section 95 should be reviewed when a receipt may fall within profits chargeable to tax; taxpayers and advisers must first eliminate a more specific head or exclusion before using the residual head.
Evidence to retain
The section 95 support file should contain the receipt agreement, bank trail, valuation material, payer information and a written head-of-income analysis tied to profits chargeable to tax.
1961 Act bridge
| Legacy provision | Legacy heading | Mapping |
|---|---|---|
| 59 | Profits chargeable to tax. | Renumbered / mapped |
The bridge is a research aid. Legacy case law carries over only after the current wording and transition rules are matched.
Rules and forms linked to this section
No provision-specific Rule was independently mapped from the current Rules register for this section. That does not mean the wider Rules are irrelevant.
Worked application
Prepare a hypothetical transaction involving profits chargeable to tax. Identify the person, tax year, trigger, evidence and connected provision first; then apply section 95 step-by-step and document why each statutory condition is or is not met.
Common mistake
A section 95 mistake is to treat profits chargeable to tax as a catch-all without testing its specific inclusion, valuation, deduction and exception rules against the actual receipt.
Compliance approach
Identify the statutory trigger for section 95, lock the relevant tax year, reconcile the facts to the operative sub-section, preserve the evidence trail and separately test every linked Rule, Form, Schedule and exception before finalising the return position.
Numeric / timing checkpoints in the operative text
- No standalone numeric checkpoint should be inferred from the heading; read the operative text.
Related provisions
- Section 38
- Section 92
- Section 94
- Section 96
Current statutory text
Primary-source trail
- Consolidated Income-tax Act, 2025 (as amended by Finance Act, 2026) (official external source)
- Income Tax Department - Act/Rules/Forms hub (official external source)
- CBDT commencement material - Act operative from 1 April 2026 (official external source)
Source status: full Section 95 statutory text in the local source corpus; reconciled to the current consolidated Act control on 8 October 2026.