Income-tax Act, 2025 · Part D — Profits and gains of business or profession

Section 56Special provision in case of interest income of specified financial institutions

Income-tax Act, 2025 (30 of 2025)

(1)

Irrespective of anything to the contrary contained in this Act, the interest income in relation to bad or doubtful debts of a specified financial institution shall be chargeable to tax under the head “Profits and gains of business or profession” in the tax year in which such interest is—

(a)credited to the profit and loss account; or

(b)actually received, whichever is earlier.

(2)

For the purposes of this section,—

(a)“specified financial institution” means—

(i)a public financial institution; or

(ii)a scheduled bank; or

(iii)a co-operative bank, other than—

(A)a primary agricultural credit society; or

(B)a primary co-operative agricultural and rural development bank; or

(iv)a State Financial Corporation; or

(v)a State Industrial Investment Corporation; or

(vi)any such class of non-banking financial companies, as may be notified by the Central Government;

(b)“bad or doubtful debts” shall be such categories of debts, as may be prescribed, having regard to the guidelines issued in relation to such debts by the Reserve Bank of India.

Referenced by

§ 127(9)

§ 207(5)

§ 208 Tax on income from units purchased in foreign currency or capital gains arising from their transfer.

§ 209 Tax on income from bonds or Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer.

§ 210 Tax on income of Foreign Institutional Investors from securities or capital gains arising from their transfer.

§ 27 Manner of computing profits and gains of business or profession

§ 81 Advance money received

§ 81(b)

Rule 42 Special provision regarding interest on bad and doubtful debt of specified financial institution