Income Tax Act 2025: Section 93 for Tax Year 2026-27

Deductions

[Section-93 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]

Section 93(1) of Income Tax Act 2025

93(1) The income chargeable under the head “Income from other sources” shall be computed after making the following deductions:—

• (a) for dividends [excluding those referred to in section 2(40)(f) or interest on securities, any reasonable sum paid as commission or remuneration to a banker or any other person for the purpose of realising such dividend or interest on behalf of the assessee;
• (b) for income of the nature referred to in section 92(2)(c), so far as may be, an amount as per section 29(1)(e);
• (c) for income of the nature referred to in section 92(2)(f) and (g), so far as may be, an amount as per section 28(1)(a), (b), (d), section 33, and subject to the provisions of section 28(2);
• (d) for income in the nature of family pension (a regular monthly amount payable by the employer to a family member of an employee upon the death of such employee),––
  • (i) an amount equal to one-third of such income or twenty-five thousand rupees, whichever is less, where income-tax is computed under section 202(1); and
  • (ii) an amount equal to one-third of such income or fifteen thousand rupees, whichever is less, in any other case;
• (e) any other expenditure (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for making or earning such income;
• (f) for income of the nature referred to in section 92(2)(i), an amount equal to 50% of such income and no other deduction shall be allowed under this section.

Section 93(2) of Income Tax Act 2025

93(2) In respect of––

• (a) dividend income of the nature referred to in section 2(40)(f), no deduction shall be allowed;
• (b) any other dividend income [other than in clause (a)], or income from units of a Mutual Fund specified under Schedule VII (Table: Sl. No. 20 or 21) or income from units of a specified company as referred to in section 2(h) of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002, only deduction allowed shall be interest expense which, for any tax year, shall be limited to 20% of such income (included in the total income for that year, without deduction under this section).

FAQs on Section 93 of Income Tax Act 2025

What is the general rule for deductions under Section 93(1) of the Income Tax Act, 2025?
The income under “Income from other sources” is computed after allowing specific deductions listed under Section 93(1).

What deduction is allowed for dividends or interest on securities under Section 93(1)(a)?
A reasonable sum paid as commission or remuneration to a banker or any other person for realizing such dividend or interest on behalf of the assessee is allowed as deduction, excluding dividends referred to in section 2(40)(f).

Is commission paid for collecting dividends covered for deduction?
Yes, reasonable commission or remuneration for realizing dividends (except those under section 2(40)(f)) is deductible.

What deduction is allowed for income referred to in section 92(2)(c) under Section 93(1)(b)?
An amount as per section 29(1)(e) is allowed as deduction.

What deductions apply for income referred to in sections 92(2)(f) and (g) under Section 93(1)(c)?
Deductions as per section 28(1)(a), (b), (d), and section 33, subject to the provisions of section 28(2), are allowed.

What is the deduction allowed for family pension under Section 93(1)(d)?
For family pension, one-third of such income or twenty-five thousand rupees, whichever is less, if computed under section 202(1); otherwise, one-third of such income or fifteen thousand rupees, whichever is less.

How much family pension deduction is available when tax is computed under section 202(1)?
An amount equal to one-third of the family pension or twenty-five thousand rupees, whichever is less.

How much family pension deduction is available in cases other than section 202(1)?
An amount equal to one-third of the family pension or fifteen thousand rupees, whichever is less.

Is general expenditure related to earning income from other sources deductible under Section 93(1)(e)?
Yes, any expenditure (not being capital expenditure) laid out wholly and exclusively for earning such income is deductible.

Is capital expenditure deductible under Section 93(1)(e)?
No, capital expenditure is not deductible under Section 93(1)(e).

What is the deduction allowed for income referred to in section 92(2)(i) under Section 93(1)(f)?
An amount equal to 50% of such income is allowed as deduction, and no other deduction is permitted under this section.

Can any other deduction be claimed for income referred to in section 92(2)(i)?
No, only 50% of the income is deductible and no other deduction is allowed.

Are deductions allowed for dividend income referred to in section 2(40)(f) under Section 93(2)(a)?
No deduction is allowed for dividend income referred to in section 2(40)(f).

What deduction is allowed for dividend income not referred to in section 2(40)(f) under Section 93(2)(b)?
Only interest expense is allowed as deduction, subject to a limit of 20% of such income.

What deduction is allowed for income from units of a Mutual Fund under Section 93(2)(b)?
Only interest expense is allowed, limited to 20% of such income included in the total income for that year.

What deduction is allowed for income from units of a specified company under Section 93(2)(b)?
Only interest expense is allowed, limited to 20% of such income included in the total income for that year.

Is there any restriction on the amount of interest expense deduction for dividend or unit income?
Yes, the deduction for interest expense is limited to 20% of the relevant income included in the total income.