§ 105
Chapter VI — Aggregation Of Income
Unexplained expenditure
Income-tax Act, 2025
If you incur expenditure and can't explain its source, or your explanation isn't satisfactory, it may be considered as part of your income. This applies if you offer no explanation or an unsatisfactory one.
- The amount deemed as income won't be allowed as a deduction under this Act.
📜 Official text of the section +
105. (1) Where any expenditure has been incurred by the assessee in any tax
year, and—
( a) the assessee offers no explanation about the source of such expenditure
or part thereof; or
( b) the explanation offered about the source of such expenditure by the
assessee is not satisfactory in the opinion of the Assessing Officer,
then, the amount covered by such expenditure or part thereof, shall be deemed to
be the income of the assessee for that tax year.
(2) Irrespective of any other provision of this Act, the amount deemed as income in
sub-section (1) shall not be allowed as a deduction under this Act.
Amount borrowed or repaid through negotiable instrument, hundi, etc.
Plain-language summary — not the official text. Refer to the bare Act and confirm with a professional for your specific case.