Section 115BBG of Income Tax Act for AY 2023-24

Section 115BBG of Income Tax Act amended by Finance Act. Determination of tax where total income includes income on which no tax is payable.

Amended and updated notes on section 115BBG of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to determination of tax where total income includes income on which no tax is payable.

Chapter XII (Sections 110 to 115BBG) of the Income Tax Act 1961 deals with the provisions related to determination of tax in certain special cases. Section 115BBG of IT Act 1961-2020 provides for determination of tax where total income includes income on which no tax is payable.

Recently, we have discussed in detail section 115BBF (Tax on income from patent) of IT Act 1961. Today, we learn the provisions of section 115BBG of Income-tax Act 1961. The amended provision of section 115BBG is effective for financial year 2022-23 relevant to the assessment year 2023-24.

In this article, you will learn detail of the provisions of section 115BBG of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962, regulations, notifications, circulars, orders and Press Release by CBDT, Income Tax Department and the Ministry of Law and Justice, Government of India.

Section-115BBG: Determination of tax where total income includes income on which no tax is payable

Section 115BBG(1) of Income Tax

Where the total income of an assessee includes any income by way of transfer of carbon credits, the income-tax payable shall be the aggregate of—

  • (a) the amount of income-tax calculated on the income by way of transfer of carbon credits, at the rate of ten per cent; and
  • (b) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (a).

Section 115BBG(2) of Income Tax

Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance shall be allowed to the assessee under any provision of this Act in computing his income referred to in clause (a) of sub-section (1).

Explanation: For the purposes of this section, “carbon credit” in respect of one unit shall mean reduction of one tonne of carbon dioxide emissions or emissions of its equivalent gases which is validated by the United Nations Framework on Climate Change and which can be traded in market at its prevailing market price.


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