Section 195
Section 195: tax on income referred to in sections 102 to 106
Section 195 fixes a flat tax rate for a category of income that the Act deals with separately in sections 102 to 106, whether that income is reflected by the assessee in the return of income or is determined by the Assessing Officer.
What the section says
Where the total income of an assessee includes income referred to in section 102, 103, 104, 105 or 106 - either because it is reflected in the return of income furnished under section 263, or because the Assessing Officer determines that such income exists (and it is not already covered by the return) - the income-tax payable is the aggregate of:
- Income-tax calculated at the rate of 30% on the income referred to in sections 102 to 106; and
- Income-tax with which the assessee would have been chargeable had the total income been reduced by that income.
No deductions, allowances or loss set-off against this income
Irrespective of anything else in the Act, no deduction for any expenditure or allowance, and no set-off of any loss, is allowed to the assessee under any provision of the Act while computing this income.
Frequently asked questions
What rate applies to income under sections 102 to 106?
A flat 30%, separately from the tax computed on the rest of the assessee's total income.
Can I claim expenses or set off losses against this income?
No - Section 195 expressly bars any deduction for expenditure or allowance, and any set-off of loss, against income falling under sections 102 to 106.
Does it matter whether I reported this income myself or the Assessing Officer found it?
No - Section 195 applies whether the income is reflected in the return of income furnished under section 263, or is determined by the Assessing Officer and not already covered by the return.
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Get help responding to an assessment involving special-rate incomeLast updated 9 September 2026